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EquityLine Capital (Delaware) LP
506(c) Offering Platform

INTRODUCTION TO OUR COMPANY

EquityLine Capital (Delaware) LP (the “Partnership,” or the “Company”) is a Delaware Limited Partnership formed for the purpose of acquiring originated mortgages or mortgage secured debentures or notes (the “Notes” or the “Mortgages”) primarily from EquityLine Mortgage Investment Corporation (“ELMIC”), a party owned and managed by the principals of the Partnership and operating a Canadian mortgage lender. Potential investment could be made in or through other affiliated mortgage lenders. The Partnership intends to acquire mortgages and maintain a portfolio of mortgages or mortgage secured debentures or notes with the mortgages consisting primarily of residential non-conventional mortgages and “Alt-A” Mortgages for the purpose of generating potential investment returns for Limited Partners in the Company.

The investment objectives of the Partnership include the strategy to include investments (“Portfolio Investments”) in real estate projects primarily in Canada and the United States to enhance the fixed income returns from residential mortgages. The investment strategy combines income producing real estate and mortgages for the purpose of making returns from income and capital gain (through enhancement of the real estate if and when the opportunity arises). The strategy is intended to enhance those investments returns using investments in securities, directly, indirectly or through funds, mortgage investment corporations, real estate investment trusts, private equity vehicles, second and subordinate lien loans and share investments where active investment participation is made available to the Partnership.

A unique model has been developed to balance the assurance of income and liquidity with the attractive higher returns that can be achieved from including a portion (25%) of the portfolio in an equity ownership approach to real estate ownership and development. Short term, less than 12 month term, high rates mortgages will be used as part of the portfolio to generate immediate returns, providing readily liquidated assets while real estate projects mature and the equity returns become available.

The Partnership intends to focus primarily on real estate located in urban markets in Ontario, which the Partnership believes are typically more liquid and provide less volatile security for mortgage loans than many other real estate markets. Although the Partnership intends to focus its investment in Ontario, the Partnership’s Asset Allocation Model permits the Partnership to invest in mortgages across Canada and the United States, if the Manager determines it to be advisable. The equity investment in real estate is intended to be made in up and coming Canadian and United States real estate for income markets, and primarily in rental properties with consistent cash flow.

"This independent analysis concludes that the business model and financial models developed by the executive team (of EquityLine Mortgage Investment Corporation) are reasonable and sound. The elements of the model and intended outcomes and the methodology and the mechanics to achieve those outcomes are in place"

Robert Baldauf, ICD.D, Independent Financial and Business Consultant

EquityLine Capital (Delaware) LP
506(c) Offering Platform

summary of operations

The Partnership intends to focus its investments primarily in urban markets and their surrounding areas, which the Manager believes are typically more liquid and provide less volatile security for mortgage loans. The Partnership intends to focus its investments in Ontario, particularly the Greater Toronto Area and Ottawa. However, the Partnership’s Portfolio Restrictions permit the Partnership to invest in mortgages across Canada, if the Manager determines it to be advisable. As at the date of this Offering, the Partnership has not engaged and does not currently intend to engage licensed mortgage brokers outside of Ontario. The Partnership’s focus on short-term (6 to 12 months) mortgages (e.g. home equity lines) and high value and high value-to-loan mortgages requiring prepayment of interest is primarily designed to reduce risk in the portfolio and increase liquidity of the investments.

The Manager believes that these strategies combined provide the Partnership with opportunities to:

  • obtain favorable yields and maximize returns through efficient sourcing and management of mortgage loans secured by real property;
  • take advantage of yield benefits which arise from the Partnership’s quick access to capital through efficient processing and management of opportunities;
  • take advantage of yield benefits which arise from the Partnership’s ability to offer more flexibility with the loans;
  • gain access to a continuous supply of mortgage investment opportunities; and
  • mitigate risk in the investment selection process through the significant experience and comprehensive underwriting practices of the Partnership and Manager.

The long-term strategy of the Partnership is to grow the portfolio by continuing to acquire mortgages or mortgage secured debentures or notes. In order to facilitate the timely acquisition of mortgages, bridging the maturity of mortgages and to manage working capital timing requirements, the Partnership may obtain a loan facility with a financial institution or other lender. This facility shall not exceed 30% of the Partnership’s total assets. As at the date of this Offering, the Partnership does not have a loan facility outstanding and has not entered into any discussions with lenders regarding any potential loan facilities.

EquityLine Mortgage Investment Corporation shall serve as the primary but non-exclusive Originator of loans for the Partnerships Loan Portfolio. ELMIC qualifies as a “mortgage investment corporation” (within the meaning of the Income Tax Act (Canada). By qualifying as a mortgage investment corporation, ELMIC is a non-bank provider of residential, and to a lesser extent, commercial, real estate finance. ELMIC finances loans that are secured by real estate assets but that may be identified as too risky by conventional bank lenders or loans which need to be funded quicker or are more customized than conventional bank lenders can accommodate. ELMIC’s investment objective is to preserve investors’ capital while providing a consistent stream of cash distributions. Investing predominantly in short-term residential, and to a lesser extent, commercial, real estate mortgage loans, ELMIC seeks to make loans in the alternative mortgage market principally in the residential mortgage market.

Home Equity Lines of Credit

The mortgages provided by ELMIC are in most circumstances “home equity lines of credit”, which are second mortgages that have interest rates that fluctuate with the prime rate. ELMIC’s home equity lines are revolving credit lines that provide property owners with additional financing for debt consolidation, renovations and other uses. The mortgages typically involve an interest only payment each month and can be called at any time.

EquityLine Financial

EquityLine Financial offers mortgage brokering services, mortgage lending and private mortgage loan administration services. It is licensed as a mortgage brokerage, and through the Manager, operates as a licensed mortgage administration company, each through the Financial Services Regulatory Authority (formerly, Financial Services Commission of Ontario prior to June 8, 2019).

Loan Portfolio Investment Process

The Partnership utilizes a Loan Portfolio investment process that is characterized by a macro-to-micro approach to identify attractive mortgage investment opportunities, beginning first with a macro-level economic analysis of various geographic housing markets and properties, and second with the identification of individual mortgage investment opportunities and the assessment of specific details of each project and borrower.

Mortgage investments will be sourced by the Manager directly and through EquityLine Financial and through independent third party mortgage brokers. EquityLine Financial has an extensive broker network of external mortgage brokers. The Partnership will fund originated mortgage loans that meet the Partnership’s lending investment criteria and the Portfolio Restrictions, resulting from:

  • (i) the reputation, experience and marketing ability of the Manager;
  • (ii) the timely credit analysis and decision-making processes followed by the Manager; and
  • (iii) significant demand for capital in the market segments in which the Partnership will provide loans. At an early stage of the identification and evaluation process, the Manager will confirm that a mortgage opportunity satisfies the Partnership’s lending criteria and Portfolio Restrictions.

Once determined by the Manager to be satisfactory based on an initial review, the Manager is required to perform comprehensive due diligence of the underlying assets. This due diligence process revolves around the Manager’s system of underwriting loans, and evaluating properties and borrowers. The due diligence procedures undertaken by the Manager generally include, but are not limited to, the following considerations:

  • General Market Analysis
    • Macroeconomic variables
      • Demographic characteristics
      • Socioeconomic outlook
  • Local Market Analysis
    • Assessment of local market conditions
      • Level of infrastructure development
      • Assessment of potential liquidity of local market
  • Project Analysis
    • Financial status of borrower
  • Type of Due Diligence
    • Financial due diligence
      • Legal due diligence - including title and off-title searches (property tax payments, work orders, fire code compliance, etc.)
      • Analysis of taxes/utilities/expenses
      • Independent valuation/appraisal report produced by an accredited member of the Appraisal Institute of Canada

Canadians have a higher propensity to pay their home mortgage payments when compared with Americans. The Canadian residential default rate of 0.29% versus U.S. residential default rate of 2.49%.

— Canadian Mortgage and Housing Corporation Q2-2020 Report and the Board of Governors for the Federal Reserve System Q2-2020 Report

EquityLine Capital (Delaware) LP
506(c) Offering Platform

ELMIC MANAGEMENT AND DIRECTORS

The Company is currently managed by experienced business and sector professionals dedicated to the success of the Company and efficient execution of its planned operations.

Sergiy Shchavyelyev

Sergiy
Shchavyelyev

Limited Partner &
Individual Principal

Sergiy Przhebelskyy, Chief Operating Officer, Director

Sergiy
Przhebelskyy

Chief Operating
Officer, Director

Roman Raskin, Chief Financial Officer

Roman
Raskin

Chief Financial
Officer

Arthur Smelyansky, CIM, DMS, PFP, Chief Portfolio Officer

Arthur
Smelyansky

Chief Portfolio
Officer

Robert Kay, Executive Vice President, Director

Robert
Kay

Executive Vice President, Director

Mark Simone, Vice President

Mark
Simone

Vice
President

Stephen Clarke, Vice President

Stephen
Clarke

Vice
President

Ungad Chadda, Director

Ungad
Chadda

Independent
Director

Mark Korol, CPA, CFE, CFA, ABV, ICD.D, Director

Mark
Korol

Independent
Director

Donald Hathaway, Director

Donald
Hathaway

Independent
Director

Eric Klein, Director

Eric
Klein

Independent
Director

Willie Handler, Director

Willie
Handler

Independent
Director

". . . alternative lenders are in an ideal position to help Canadians through their ability to look at a borrower more holistically and offer shorter terms and flexible payout periods."

- "Buying or selling – key projections for Canadian real estate in 2021", Clayton Jarvis, Mortgage Broker News, January 5, 2021

EquityLine Capital (Delaware) LP
506(c) Offering Platform

terms of the offering

$50,000,000

Minimum Investment: $5,000 (500 Units)

The Company is offering a maximum of 5,000,000 Class A Limited Partnership Units (or “Class A Limited Partnership Interests”) at a price of $10.00 per Unit. Upon completion of the Offering, it is expected that up to 5,000,000 Class A Limited Partnership Units will be issued.

Summary of Distributions

The intention, subject to the discretion of the General Partner to change the terms of distribution and reflect the same in the Offering Memorandum and Schedule “B” for a Class issued for classes of Units is to make distribution as follows, provided the same will be made solely from revenue and proceeds available to the Partnership after payment of expenses and pari passu and pro rata with other Units. It is intended that Units will be entitled to distributions, on a pro-rated, pari passu basis as amongst all other holders of the same Class of Units, payable after payment of Partnership Expenses pari passu and pro rata with other Units in accordance with the terms below. Rights to distribution may vary by Class and the description in Schedule “B” as to a Class sets out the right to participate as to either (iii) or (iv) and if applicable in (v) which will be as set out in Schedule “B”. Distribution will be made monthly, established on last Business day of each month and paid 15 days after.

The distribution terms are:

  • (i) the general costs and fees for the Partnership are paid first, excluding any management fee payable as a percentage of capital invested and subject to any specific agreement as to fees and costs allocated to a Class or Series;
  • (ii) the Amount Available for Distribution which is net of the costs and fees in Section 3.6(f)(ii) of the Limited Partnership Agreement will then be calculated and allocated on a pro rata (based on Capital Contributed) pari passu basis to each Class and the Management Fee for each Class calculated and paid to the Manager subject to any specific agreement as to fees and costs allocated to a Class or Series on the basis as described in Schedule “B” of the Limited Partnership Agreement;
  • (iii) next, pari passu the net amount by Class from Section 3.6(f)(ii) of the Limited Partnership Agreement on a per Unit basis will be paid using the funds available (on a currency separate basis), (some funds may be in reserve in case of shortfall in the following months to smooth out the distributions and avoid a need to claw back in the discretion of the General Partner) until the minimum return on Capital Contribution for each Class is distributed (any balance will be retained to year end);
  • (iv) then an annual true up for the Fiscal year will be calculated and paid within 60 days of calendar year end; the true up is increase the distribution for each Unit pro rata pari passu until each Unit has received a 10% (less Management Fee) return on Capital Contribution for the Fiscal Year;
  • (v) then to divide the amount remaining (if any) of Amount Available for Distribution over the 10% on Capital Contributed (less Management Fee) firstly 50/50 with the Manager (as Manager Bonus) and then equally per Unit.

The distributions will be made on the Units to the Limited Partners as determined by the General Partner, provided the same will be made as offered in the relevant Offering Memorandum and solely from revenue and proceeds available to the Partnership after payment of expenses pari passu and pro rata with other Units.

Allocation of Net Profits and Net Losses

Net Profits of the Partnership for any Fiscal Year and Net Loss of the Partnership for any Fiscal Year will be allocated by the Manager to the Limited Partners as follows:

  • (a) Net Profits or Net Losses of the Partnership for any Fiscal Year arising from a disposition of any interest in the Investments or from any other transaction giving rise to Amounts Available for Distribution will be allocated to the Limited Partners on the same basis as for distributions as set out in Section 3.6(f) of the Limited Partnership Agreement; and<
  • (b) Net Profits of the Partnership and Net Losses of the Partnership for any Fiscal Year other than Net Profits or Net Losses arising from a disposition of any interest in the Investments or any other transaction giving rise to Amounts Available for Distribution, will be allocated to the Limited Partners on the same basis as for distributions as set out in Section 3.6(f) of the Limited Partnership Agreement.

CONTACT US

Please complete the contact form and we will get back to you about any questions you have about our offering.

Equity Line Mortgage Investment Corporation - 550 Highway 7 Suite 338 - Richmond Hill, Ontario L4B 3Z4 — info@equitylinemic.com — (416) 999-3993

EquityLine Capital (Delaware) LP
506(c) Offering Platform

so much more than what you see

prospect dashboard

The EquityLine Capital (Delaware) LP 506(c) Investor Portal provides the opportunity to learn about our investment opportunity. Once registered, you will be able to

  • Access the Private Placement Memorandum, which outlines our company and gives greater detail about our offering;
  • Access our SEC filing;
  • View real time offering metrics of how far along we are in the offering process;
  • View a timeline of your progress in the subscription process;
  • View company contact information; directly contact the administrator;
  • Easily upgrade your account with the click of a button.

Once your account is upgraded you will have additional access including the ability to:

  • Complete the subscription documents;
  • Upload subscription and accreditation documents as applicable;
  • View specific information for investing and instructions on transfer of investment funds;
  • Review company documents including Reports, Financials, and Supporting Documents;
  • Access the asset portfolio as applicable;
  • Access news articles written by the company;
  • View documents associated with your account.

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