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Private Investing and Lending

Commercial | Residential | Special Situations

Lending Landscape

Return / Cost

Our segment
expanding
Bank
lending
shrinking
Alternative Mortgage
Provider

PRIVATE
LENDERS
Friends, family,
and high net worth

BANKS
CREDIT UNIONS

Risk
Private Investing and Lending
Commercial | Residential | Special Situations

About Us

Eleven year track record


$150,000,000 in funded mortgages
Brian Moskowitz is a past Director of IMBA
Member of various Homebuilders Association

We are lenders:

Moskowitz Capital
Management Inc. (FSCO
Broker & Administrator)
Moskowitz Capital
Mortgage Fund II Inc.
(Mortgage Lender)

Private Investing and Lending


Commercial | Residential | Special Situations

Why Choose Us?

You deal directly with the decision makers


You get an honest answer
We deliver on our commitments
We protect the referral source
Our borrowers and referral sources are
highly successful

Private Investing and Lending


Commercial | Residential | Special Situations

Our Underwriting Philosophy

Common Sense
Security value
Ability to repay
Flexible deal structure
Quick turnaround time
Cash Flow
.
Debt Service =
Total Debt Obligation

Private Investing and Lending


Commercial | Residential | Special Situations

Loan Criteria Summary

Loan Amount:
$250,000 to $6,000,000
Term:
6 to 36 months
Rates:
6.95% to 12.50%, subject to risk
Lender Fee:
2% to 4%
Amortization:
Often interest only

Prepayment:
Flexible
Personal guarantee:
Required in most situations
Security:
1st mortgage, 2nd mortgage on a
selective basis
Timeline:
Term sheets in 24 hours upon
presentation of good information
Funded deals in two weeks

Private Investing and Lending


Commercial | Residential | Special Situations

Loan Criteria Summary

Purpose:
Term, construction, environmental
remediation, special situations
Property Types:
Single and multi-family residential,
commercial, industrial, land
Non-traditional uses:
Assisted care, alcohol serving
establishments, auto service, dry
cleaners
Location:
Ontario, Nova Scotia, New
Brunswick, Newfoundland and
Saskatchewan

Loan to Value: Max:


75% on residential, 70% on
commercial, higher loan amounts
with additional real estate collateral
Reporting:
NOAs and Job Letters
Rent roll for rental properties
Notice to Readers (we can
consolidate)
Debt:Service Ratio:
1.1:1, flexible
Due Diligence:
Appraisal
Often Phase 1 ESA on commercial
properties

Private Investing and Lending


Commercial | Residential | Special Situations

Pricing Landscape
Fees (% of loan amount)

Interest Rate

Bank

0.5%

4% - 7%

Credit Union / BDC

1%-2%

5% - 10%

Moskowitz Capital

2% - 4%

6.95% - 12.50%

Other Privates
friends and family

5%-15%

12% - 30%

Private Investing and Lending


Commercial | Residential | Special Situations

What we need to size up the loan

One page summary


Application (with net worth summary)
Credit Bureau
Income support

Financial statements
NOA
Forecast
Rent Roll

Photos
Follow-up phone call
Private Investing and Lending
Commercial | Residential | Special Situations

Tips to submitting a deal


A picture is worth a thousand words
Send a complete package in one email
If it is easier for us to track, youll get a quicker
response

Make your case with facts


Show us that the Borrower can pay
Cash flow analysis

Set realistic expectations


Plan for a three way conference call
Private Investing and Lending
Commercial | Residential | Special Situations

Characteristics of a good broker

Integrity
Transparency
Action oriented
Working knowledge of deal
Strong communication skills
Attention to detail

Private Investing and Lending


Commercial | Residential | Special Situations

What is in it for you?


1% - 2% commission
Actual Recent Examples:
$30,000 Broker Fee - $3,000,000 loan
$12,000 Broker Fee - $800,000 loan
$3,250 Broker Fee - $220,000 loan

Lower E&O rates than private lenders


Repeat business, often within 12 months
Adding value by placing a current clients
difficult deal
Private Investing and Lending
Commercial | Residential | Special Situations

Whos making the money?

Commercial property owners


Developers
Home builders
Small Business Entrepreneurs
Target those that are action oriented

Private Investing and Lending


Commercial | Residential | Special Situations

Benefits of a Construction Mortgage


Assemble the appropriate credit mix
Finance land, materials and labour
Own the land, control the project
Shop around for deals on materials

Clear set of terms; no demand clauses


Lien rights are powerful and disruptive

Build a long term relationship

Private Investing and Lending


Commercial | Residential | Special Situations

Residential Construction

Spec infill construction of a semi-detached family dwelling


First time builder
Loan Value: $645,000
Position: First
Location: Ottawa
LTV: 75%
Debt Service: Interest Reserve
Reporting: NOAs

Private Investing and Lending


Commercial | Residential | Special Situations

Example Construction Loan Breakdown


Use of Proceeds

Source of Proceeds

Land cost

341,000 Land Facility

225,000

Hard Cost

423,000 Construction Facility

400,000

Interest Cost

20,000 Interest Reserve Facility

20,000

Soft Cost

40,000 Moskowitz Capital Loan

645,000

Fee, legal, etc

26,000 Builder Equity

205,000

$850,000

Sale Revenue: $1,150,000


Profit: $300,000
Return on Equity: 146%

$850,000

Multi-Family Construction

Experienced home builder needed funds quickly


Spec construction
Loan Value: $1,950,000
Position: First
Location: Fredericton, NB
Debt Service: Interest Reserve
Reporting: Review Engagement

Private Investing and Lending


Commercial | Residential | Special Situations

Example Construction Loan Breakdown


Use of Proceeds

Land cost
Hard Cost

Source of Proceeds

300,000 Land Facility


2,450,000 Construction Facility

200,000
1,600,000

Interest Cost

150,000 Interest Reserve Facility

150,000

Fee, legal, etc

100,000 Moskowitz Capital Loan

1,950,000

Builder Equity

1,050,000

Total

$3,000,000 Total

Sale Revenue: $3,673,000


Profit: $673,000
Return on Equity: 64%

$3,000,000

Renovation
Home renovator and property manager seized lucrative opportunity
Deal done in an afternoon
Loan Value: $760,000
Increased from $433,000

Position: First
Location: St. Johns, NL
LTV: 100%
Debt Service: 1:1 during renovations
Reporting: Rent Rolls
and Notice to Readers

Private Investing and Lending


Commercial | Residential | Special Situations

Rental Housing

Frequent bank borrower needs equity for new project


72 unit Multi-family rental housing
Loan Value: $800,000
Position: Second
Location: Moncton, NB
LTV: 64%
Debt service: 1.04:1 on subject, 4.5:1 with corporate guarantee
Reporting: Rent roll and Notice to Readers

Private Investing and Lending


Commercial | Residential | Special Situations

Short-Term Stay

Purchase and improvements to a 10-unit short-term stay building


Loan Value: $340,000
Position: First
Location: Grand Falls - Windsor, NL (14,000 pop.)
LTV: 65%
Debt service: 1.04:1 on subject, 3.2:1 with personal income
Reporting: Rent roll

Private Investing and Lending


Commercial | Residential | Special Situations

Poor Financial Reporting


Refinance of a commercial building, tenanted by various companies
owned by the same principal
Loan Value: $360,000
Position: First
Location: Saint John, NB
LTV: 67%
Debt service: 1.03:1 on subject, 1.22:1 with personal income
Reporting: Non-consolidated Notice to Readers
Four companies

Private Investing and Lending


Commercial | Residential | Special Situations

Litigation

ETO to construct Tim Hortons


Certificate of Pending Litigation registered on title
Loan Value: $1,400,000
Position: Second
Location: Toronto, ON
LTV: 70%
Debt service: As is 0.72:1, with Tim Hortons 1.78:1
Reporting: Non-consolidated Notice to Readers & Rent Roll
Three companies

Private Investing and Lending


Commercial | Residential | Special Situations

Environmental Remediation

Environmental remediation of dry cleaner


Major bank would not renew
Loan Value: $300,000
Position: First
Location: Dartmouth, NS
LTV: 47%
Debt service: 1.50:1
Reporting: Review Engagement

Private Investing and Lending


Commercial | Residential | Special Situations

Contact Us

2200 Yonge St., Suite 1002


Toronto, Ontario
M4S 2C6

1701 Hollis Street, 8th Floor 115 2nd Avenue North, Suite 107J
Saskatoon, Saskatchewan
Halifax, Nova Scotia
S7K 2B1
B3J 3M8

1.866.841.5385
deals@moskowitzcapital.com

AdministrationLic #11928BrokerageLic #10922


Private Investing and Lending
Commercial | Residential | Special Situations

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