Smart buyers always ask intelligent questions. Here are a few of the most popular ones.

Q: What is a ‘non-recourse mortgage’?

A: This type of mortgage protects you as an investor. In the unlikely case that the rental yield from any of our Shopping malls is not enough to cover the mortgage payment, you are not liable for any shortfall. In 28 years of business, this has never happened with any of our investments, but we use this type of mortgage to protect your investment.

Q: Canada property value is tied to the value of property in the USA, right?

A: NO. The Canadian and US economies are totally separate and operate independent of each other.

Q: The Canadian Dollar is tied to US Dollar in terms of Exchange rate right?

A: NO. The Canadian banking system is completely separate to the USA system. Its solid, conservative practices have earned it a AAA rating by Standard & Poors and the Canadian banking system is rated as the safest in the world by  the World Economic Forum.

Q: Does Canada have a fiscal deficit like the USA?

A: NO. Canada’s fiscal surplus was CAD 8 billion (USD 6.4 billion) in the 2007-08 tax year.   Canada has had 12 years of fiscal and trade surplus, totally opposite to the USA

Q: Does Canada have a trade deficit like the USA?

A: NO. Canada’s trade surplus was CAD4.9 Billion (USD3.9 billion) in 2009.

Q: What is a ‘Triple-net’ lease?

A: All of our tenants sign a triple-net lease. This means they are responsible for all repairs and maintenance to the interior of the premises they rent, all taxes, and all management fees.

Q: Is This Land Banking?

A: NO. All of our properties are fully functioning shopping malls with existing tenants paying rent. Most have a waiting list of tenants as well.

Q: Is this a Trust Fund?

A: NO.

Q: Is this a REIT?

A: NO.

Q: How secure is my investment?

A: Your investment is very secure. You become one of the actual owners of the Plaza. The debt to equity ratio is less than 55%. (By comparison, most homes have a 75% ratio.)

Q: Can I liquidate my asset?

A: YES. Since you are an actual owner, you can sell to anyone at anytime. There is always a waiting list of investors ready to take up your share.

Q: Are there any extra fees?

A: NO. For a minimum investment of CAD 50,000 there are no extra fees.

Q: How long will the shopping mall be held?

A: After five years a vote will be held; if 66% of the partners agree, the mall will be sold.

Q: What are the risks?

A: The Calgary economy could weaken so much that businesses would start to close and move out of the plaza. However, all of our shopping malls have tenants such as banks, supermarkets, post offices and local shops that supply daily-need items. This means that these businesses are well-equipped to survive, even in tough times.

Q: What is the worst case scenario?

A: it is very, very unlikely that you would ever lose money investing with our Strategic Partners. 50% of the existing tenants in any shopping mall they own would need to go bankrupt before the mortgage payment could not be met. This in itself is highly unlikely. As all of our mortgages are 50%, even in this unlikely and worst case scenario, they can still cover the mortgage. They also keep a mortgage reserve fund to cover any shortfall that might occur. Add to this the fact that all our mortgages are non-recourse mortgages, which means you are not liable for any shortfall in the mortgage payment and you can see that your investment is very safe.

The worst possible case scenario is that we would simply hold on to the shopping mall for a longer period of time and keep generating income from it until such time as market conditions are favourable for a sale.

Q: Can I sell my stake at any time?

A: YES. Unlike many other investments they can put your stake up for auction and they won’t charge you a penalty for early encashment. You will receive your initial stake back plus any income you have earned from existing cashflow. The whole process takes about 8 weeks to complete. Available shares are normally snapped up immediately, though only 5 investors in over 3,500 have elected to go down this route as our investment is so solid.

Q: Why is this investment a good one at this time?

A: The combination of safety and high after tax paid returns makes this investment one of the best on the market at this time. It will stand strong in comparison with any other investment on the market today.

Q: Has anyone ever lost money?

A: NO. Our Strategic Partners proud to say that in over 28 years of business, they have never lost a cent of our investors’ money.

Q: Are rental increases regulated by the government?

A: NO.

Q: What fees do I need to pay?

A: The only fee you need to pay upfront is the CAD 500 legal fee. 2% of the rental income goes to them as commission and 2.5% goes to their accountants as an admin fee. This leaves 95.5% for you.

Our Strategic Partners also earns a sales commission of 6% for selling the shopping mall or releasing equity through refinancing at the end of the 5 year term. They also earn CAD 50 cent per square foot for increasing rents upon renewal for existing tenants and CAD 1 per square foot for rent increase they negotiate on new leases. You only pay these fees at the end of the term.

Q: Isn’t it better to just keep my money in the bank and wait for property prices to drop more?

A: NO. You start earning rental income from the first day you invest. This works out at a historic 6% p.a. which is more than most banks offer as interest.

Q: I’m ready to go ahead – what are the next steps?

A: it’s easy! Simply fill out the application form and provide us with proof of address – a utilities bill will do, plus a photocopy of some photo ID such as your passport or ID card. We will then prepare the agreement of purchase and sale, plus other closing documents. You will need to transfer payment on or before the day of signing the closing documents. Please note that you will need to pay the CAD 500 legal fee at the same time as you make the payment.