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Howard Group,
Axcess Capital offer sound investment strategy
Low-risk mortgage investments reap 10-14% returns
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| The
high-achieving Axcess Capital Partners/Howard Group team
includes, from left, Bill Buterman, Peter Weichler, Grant
Howard, Trevor Stott and Jim Masleck. |
Investors hardly need to be reminded that the stock market
isn't what it used to be. What a difference three years make.
GICs and other bank offerings are a safer bet, but interest
rates these days aren't much bigger than those numbers on
the end of movie-sequel titles.
However, deals that offer far better rates can be risky.
People who want their hard-earned money to work for them
at a reasonable interest rate often turn to an established,
prestigious firm such as the Howard Group, which prides itself
on steering clients toward investments with a good rate of
return but minimal risk.
The Howard Group recently formed an alliance with another
respected Calgary company - "Axcess Capital Partners"
- to offer clients safe, high- yielding investments based
on mortgages.
Axcess arranges short-term mortgages for real estate and
property owners, primarily in Alberta and British Columbia.
The mortgages are typically 12 to 24 month' duration, with
yields of 10 per cent or more, up to 14 per cent in some cases.
That kind of performance is just what the Howard Group's
Jim Masleck was seeking for his clients, investors with sums
ranging from $25,000 to the hundreds of thousands.
"I was out shopping the market and I wasn't all that
impressed with what I found at first," says Masleck.
"Then I came to see Bill (Buterman) and Trevor (Stott)
at Axcess and they really impressed me, in terms of the product
offerings and their approach to the business."
Masleck came to the conclusion that Axcess had high standards
when underwriting in the mortgage investment business, and
he was right. The company strives to exercise proper "due
diligence" in "checking out" a potential mortgage
investment.
As Buterman explains: "Mortgage lending is primarily
an assessment of two things - the Risk OF Foreclosure and
the Risk ON Foreclosure."
In other words, is there sufficient cash flow and is it secure
enough to maintain the debt load? Then, conversely, if the
cash flow ceases, is there sufficient equity to recover the
investors' capital. Keeping that in mind allows for some very
good investments and excellent returns.
In the long haul, real estate is one of the economy's less
perilous forms of investment. It remains relatively stable
and secure.
But for the people at the Howard Group and Axcess Capital,
the key is to understand that a file can fail. Thus each project
or building in question must be scrutinized in a detached
way, with close regard to an exit plan if there were such
an occurrence.
Buterman cites the example of a $1-million building on the
edge of downtown Calgary. "It returns 10.375 per cent
over two years," he says. "The mortgage is 62.5
per cent of the value of the building, so there's more than
$600,000 equity left in it. Cash flow is roughly $15,000 a
month gross. And the payments are $7,500."
Another Axcess file involves a Vancouver building worth $21
million, on which investors hold a mortgage of $12.5 million.
Because the owner's equity is close to $8 million dollars,
he has a great deal of capital at risk and to subsequently
lose if our investors were to have to "Realize"
on the security.
This cautious approach pleased Masleck from the start.
:What we really saw here in Bill and Trevor was their due
diligence process, and their genuine concern for the investors'
capital, which we thought was substantially different from
many of their competitors out there."
Axcess also has a very strong policy of dealing only in arm's-length
transactions - that is, projects in which the company or its
people have NO personal stake. Otherwise they'd be reluctant
to quickly resolve when common sense warranted it because
it was their "baby". . . and surely if we just give
it more time, blah, blah, blah . . .
By being independent, Axcess can react quickly for the safety
and for the benefit of their investors.
For an investment that is REAL - "real property, with
real security with real returns," call Jim Masleck in
Calgary at 403.221.0915, or toll free at 1.888.221.0915, or
e-mail him at jim@howardgroupinc.com
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