Targeting an annual return of 7.5%
(potential upside with typically rare foreclosures).
Equityline’s innovation is exemplified in the following article that’s in the news.
High income that has been so predictable, it’ll bore you.
In today’s low interest rate environment, it can be tough to find an investment that will support your monthly income needs. That’s where the EquityLine Capital Limited Partnership, a Regulation A offering with a scheduled annual return of 7.5% (with potential upside e.g. if interest rates rise, our distributions should follow), comes in.
EquityLine has delivered consistent, predictable income month in and month out: our portfolios have never missed a distribution payment, even during the 2020-2021 COVID pandemic.
EquityLine Capital LP invests primarily in EquityLine Mortgage Investment Corporation “EquityLine MIC” , a Canadian mortgage lender. EquityLine MIC has delivered consistent, predictable income month in and month out: our portfolios have never missed a full distribution payment.
A UNIQUE CANADIAN LOAN STRUCTURE.
EquityLine Capital LP offers U.S. investors access to home equity mortgages through a Canadian Mortgage Investment Corporation (MIC), a lending structure unique to Canada. The MIC receives a stream of monthly payments from “qualified” borrowers which it then distributes as income to investors. As a flow-through structure, the MIC can’t retain any of this income, and must distribute ALL of it by the end of each year.
CANADA AND MICs
Who we’re making loans to (and why):
Let’s start with the culture: Canadians work hard to not skip mortgage payments.*
Timing is one of the reasons why. The vast majority of Canadian home mortgages span five years or less—very different from the fifteen-, to thirty-year terms in the United States. That means requalification at least every five years, which helps keep mortgage borrowers (homeowners) compliant. EquityLine’s (MIC) loans, on average, span just 8.3 months, helping to reduce risk by reducing the length of the loan and enabling the fund to move quickly on new investment opportunities.
Our borrowers typically don’t qualify for bank financing, but they have much better credit than the average U.S. borrower. Often, they’ve been denied on a technicality, for example; they haven’t worked at the same job for at least three years.
Because EquityLine (MIC) derives its income from mortgage payments, they can be more consistent and reliable than most REITs, which typically receive income from rents. If you walk away from your rent, you’ll lose your space and security deposit; if you walk away from your mortgage, on the other hand, you’ll lose your home—a far more drastic outcome. In fact, Canada avioded the 2008 mortgage crisis and didn’t experience the drastic loss of homeownership like in the US.
*Source: Mortgage and Consumer Credit Trends: Q4 2021 Data, CMHC SCHL
OUR INVESTMENT PROCESS FURTHER REDUCES RISK.
EquityLine Mortgage Investment Company’s portfolio will be comprised of loans to individual homeowners in the greater Toronto area. These are not people seeking higher-yielding mortgages because they cannot afford a home—instead, they’re homeowners who have taken out first or second loans on homes that, in most cases, have been owned for several years and built up significant equity. Loans in our portfolio average just 8.3 months, which further lowers default risk, as does a due diligence process that assesses each borrower individually. We are raising $50 million to deploy carefully, most likely at around $250,000 per loan.
A high-yielding security you probably have not heard of.
Since 2018, EquityLine has been generating and distributing above-market income. Our returns have been so consistent that you might even consider them dull—after all, they generated steady income payments, month after month. But in today’ economy, isn’t a consistent track record a little bit beautiful?
*Sources: Money markets: FDIC.gov | Treasuries: Treasury.gov | Mortgage durations: Ratehub.ca/mortgage-term | High Yield: ICE BofA US High Yield Index Effective Yield | Dividend Yield: multpl.com/s-p-500-dividend-yield
REASONS TO INVEST
Seven reasons to consider EquityLine Capital Limited Partnership:
A targeted 7.5% fixed rate of return (with potential upside, as interest rates rise, our distributions should follow)
Mortgage investment corporations provide investors with flow-through income. EquityLine Capital LP aims to deliver a 7.5% annual return, distributed monthly.
Carefully managed risk
Canadian mortgages don’t usually offer terms that exceed five years. The mortgages we invest in are even shorter-term—usually eight to nine months, and rarely over twelve. By investing in short-term mortgages with contracted fixed terms to carefully screened borrowers, we believe that we do mitigate risk.
Access to Canada’s unique and thriving housing market
According to the NY Times, Toronto, the Quietly Booming Tech Town.* Add in the government’s pro-immigration stance and new buyers are continually entering the market as they take residence in Canada. As a result, new home sales have come roaring back since the pandemic.
Strong demand for home equity mortgages, allows EquityLine MIC to be selective about the mortgages we underwrite. For instance, we consider what we believe to be high-quality residential property in the greater Toronto area. All properties are assessed by a licensed appraiser to determine market valuation at the time we provide the mortgage.
*NY Times, March 22. 2022
Low default risk
Canadians are notoriously conservative about money, and for the most part, pay their mortgages on time. In July of 2021, the Bank of Canada reported that just 0.18% of Canadian mortgages were in arrears.
Protection from rising rates — as interest rates rise, our distributions should follow.
With global economies beginning to recover from the COVID pandemic and central banks moving to restrain inflation, mortgage rates are rising. That can hurt returns on many long-term bond strategies, but EquityLine MIC portfolios have a built-in answer for that. Because they’re short-term—on average, around 8.3 months—we can quickly redeploy capital to adjust to changing market conditions. This could provide a higher distribution rate than our targeted 7.5%, as interest rates rise, so should the rate in which we lend funds.
Foreclosures are fast and efficient—and at our firm, they haven’t happened (but if they did, there is potentail for upside for our investors)
Our income primarily comes from mortgage payments, but what happens when a borrower fails to make interest payments?
First, we work with the buyer to come to a mutually satisfactory solution—typically, the sale of the property.
If that’s impossible, the foreclosure process in Canada is streamlined. Mortgage issuers can begin foreclosure proceedings after just two missed payments, and the foreclosure process is just 90 days. After the foreclosure process is complete, the sale is typically swift. Often, the return we realize through a foreclosure is higher than just collecting interest. This is because of the additional penalty fees that are charged.
In addition, foreclosures in Canada are very, very infrequent. To date, none of EquityLine MIC’s portfolios has ever experienced a foreclosure.
A clear path to redeem your shares
If and when you need to exit, we offer flexible redemption options. If you redeem within one year, you’ll have access to 90% of your capital; within two years, 94%; within three years, 96%; and in all subsequent years, 100%—no penalties, few restrictions, and only a minor administration fee.
For a deeper dive on the firm, our investment process and history, please download our complImentary Investment Guide.
Boring is beautiful
(when you have monthly bills to pay).
We’re targeting an annual return of 7.5% distributed monthly as dividends (with potential upside as interest rates rise, our distributions should follow).
EquityLine Capital Partnership is aiming for high monthly income without the tenants, land, or buildings to manage, nor any markets to bet on. Our 8.3-month average loan duration limits risk, as does our focus on Toronto-area homeowners in a culture that likes to make its mortgage payments—even in 2008.
We are NOT seeking to scale this into a billion-dollar business—this is a simple $75 million portfolio. We know our market, we know our borrowers, and we know our business.
Who should consider Equityline Capital Limited Partnership?
- Investors who are seeking monthly income.
- Investors with a tolerance for risks associated with mortgage backed investments.
- Investors seeking an investment that may increase its distributions as interest rates rise.
- Investors who may need access to their capital within a few years.
Invest with a market leader
EquityLine is one of Canada’s leading underwriters of alternative mortgage financing. Since our founding in 2014, when we started as a mortgage broker, we’ve been involved in mortgage financing.
In 2018, we created EquityLine Mortgage Investment Corporation to ensure a stable source of financing for borrowers, as well as provide investors with a way to benefit from the attractive risk and return characteristics of residential real estate loans in the Toronto area.
EquityLine Capital Limited Partnership primarily invests in EquityLine Mortgage Investment Corporation which lends short term loans secured by residential mortgages in the Greater Toronto Area, to qualified borrowers . Up to 25% of the EquityLine Capital LP portfolio may be invested in direct, physical real estate assets throughout the US and Canada.
We are a public company listed on the Jamaica Stock Exchange.
Some of Canada’s largest banks have vetted our process and invested in our portfolios.
We have roughly $60 million in assets under management, and we estimate that those assets will grow to $300 million within the next five to six years.
EquityLine Capital LP is an SEC-qualified offering.
Class A Limited Partnership shares—
delivering an annual total return
7.5% paid monthly
$10.00 per unit
MAXIMUM OFFERING AMOUNT
Rialto Markets, LLC
Richards, Layton & Finger
What is a Regulation A offering?
EquityLine Capital LP is structured as a Regulation A offering, a special structure that allows companies to directly sell shares to investors after its offering is qualified by the United States Securities and Exchange Commission (SEC). Reg A offerings are open to both accredited and non-accredited investors and, as a result, provide people of all income levels access to offerings that were previously only offered to individuals of considerable wealth.
MEET OUR TEAM
EquityLine Capital is overseen by an experienced team of senior managers who boast decades of experience in real estate and mortgage financing. In addition, our seasoned independent board provides additional governance and risk management for our entire enterprise. Here are our key leaders: