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307 E. Northern Lights Blvd.
Suite 202
Anchorage, AK 99503

Phone: 907-279-8551
Fax: 907-279-7448

Invest In Mortgages


Mortgages are one of the oldest, and are considered by many financial advisors to be one of the safest forms of investment for the passive investor. Each year trillions of dollars are invested in conforming residential and commercial mortgages by banks, insurance companies, and pension funds. Individuals can invest in such mortgages through mutual funds, purchase of mortgage backed securities, or collateralized mortgage obligations. Because conforming mortgages are carefully underwritten and require excellent borrower credit and excellent collateral, they are very safe investments that in recent years have produced returns in the range of 3% to 4% per year, which is considerably more attractive than Certificates of Deposit and Government Bonds that produce returns from 1% to 3%.

The subtitle of Robert Kiyosaki's excellent book "Rich Dad's Guide to Investing" is "What The Rich Invest In, That The Poor and Middle Class Do Not!" We have an investment program in Alaska Mortgages that meets Mr. Kiyosaki's criteria. While you don't have to be rich to invest in our program, you must be a person of financial substance and have a greater than average knowledge of investments.

These are Mortgages that don't meet the criteria of the highly regulated banks and insurance companies. Typically they are Private Mortgages secured by less attractive properties, borrowers with weaker credit, Mortgages secured by land, or Mortgages to borrowers whose mortgage payments exceed payment to income ratios established by conventional lenders. We sometimes also refer to these as "ugly duckling mortgages". But like the fable of the ugly duckling who turns into the beautiful swan, we have developed methods to make such Mortgages attractive investments for the sophisticated, affluent investor.

To protect the financial integrity and liquidity of our banking system and our life insurance system, government regulators allow regulated investment entities to invest in only the very best and most secure mortgages. While Rolls Royces, Mercedes, Lexuses, Lincolns, and Cadillacs are considered the best cars, there are many less expensive cars that still provide comfortable and reliable transportation. Likewise, while Private Mortgages are riskier than traditional conforming mortgages, they do provide much better investment returns. The Mortgage Investment Programs that we offer typically pay interest from 5% to 10%. To consider the significance of the rate differential between conforming mortgages and our Private Mortgages, consider the following:

• At 2% interest it takes 35 years to double your money.
• At 4% interest it takes 18 years to double your money.
• At 6% interest it takes 12 years to double your money.
• At 8% interest it takes 9 years to double your money.
• At 10% interest it takes 7.2 years to double your money.

Of course the above examples of compounding do not include the impact of taxation. That's why one of the best ways to invest in Mortgages is through your Individual Retirement Account ("IRA") or your pension or profit sharing plan. Our average investor yields about 8%. If an 8% Mortgage is allowed to compound (assume reinvestment of principal and interest payments) tax free, an initial investment of $25,000 will grow to $116,524 in 20 years.

While there are significantly higher returns on Private Mortgages, their risk exceeds the risk tolerance of some investors. That's why we have strict criteria on Mortgage Investments that we sell. In every case we limit the amount of your investment to a maximum 70% Investment to Value (ITV) ratio. (Most investment fall in the range of 50% to 65% ITV). That means that if you make a $70,000 Mortgage Investment, that investment will be secured by real estate worth a minimum of $100,000. Therefore, in the event of default, there is at least a $30,000 value margin to protect your investment. This does not necessarily mean that the owner/borrower has a 30% equity. What we do to reduce your ITV to 70% or less is, we either buy the loan from a Seller at a discount or make the whole loan and then sell you a partial interest with us retaining the riskier residual interest in excess of 70% of value. In the event of default, we always maintain the right, but not the obligation, to cure the default and continue making the borrower's payments while we foreclose on the property. However, since we do not guarantee your investment or your payments, in the event we did not exercise our option, you would be free to foreclose and our residual interest would be subordinated to the return of your investment and interest thereon.

If you are a sophisticated and affluent investor interested in Mortgage Investments earning 5% to 10% interest, then you should continue on this website by completing our Mortgage Investment Tutorial which will provide you with information to determine if Mortgage Investments are suitable for you. (Click: Mortgage Investment Tutorial).


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