Frequently Asked Questions
- Is my money secure?
All funds are secured by way of a first mortgage charged against the land and improvements to the Oak Bay Beach Hotel site.
- Is there an order of security on my investment?
No. All investors share in the security on a "parri passu" basis, meaning that, in the unlikely event of a default, the security against risk is shared equally. Every investor is paid out equally proportionate to their investment value.
- Will this fund the entire project construction?
If the bond offering is successful to the point of funding all construction costs this would be a great outcome. It is assumed that the bond offering will raise only part of the construction fund required and thus a construction lender would be brought into a part "A" of the 1st mortgage and the bond offering security would form part "B" of that same security. Details of this arrangement are spelled out in the Inter Lender Agreement upon issuance of final construction financing terms.
- What if the debt is greater than the value and the project stalls?
The lending disciplines that are in place and enforced by the fund administrator, Deloitte Touche, require that total debt on the project will not exceed 80% of the commercially appraised value of the site and site improvements upon completion. Also, all draws are subject to the review of an independent quantity surveyor who must confirm with each draw a satisfactory cost to complete analysis.
- What if the market slips and the value drops?
The market has been very volatile over the last year and yet all research indicates that waterfront property in Oak Bay will lead the way in regaining any slippage in value brought on by outside forces. Also, research reflecting the Greater Victoria real estate market reveals a strong 30 year trend of upward pressure on values. If there is slippage and the project had to be sold, an investor may wait for recovery but clearly history tells us that values have always recovered.
- When would you need my money?
We would arrange a date that matches your financial situation and our budget and schedule your investment date accordingly. You would be required to enter into a binding contract to ensure that the funds are deposited on the agreed upon date.
- How do I proceed?
Give us a call and make an appointment to receive the full disclosure package and obtain your own independent professional advice. Then complete the bond offering application and we are on our way.
