Why invest with Unity Investments if I can get higher returns from others?
Investment returns are tied to investment risk, so higher returns represent greater investment risk. Unity's investments represent an optimal balance of risk and return for our investors.
Why is your minimum investment amount set at $25,000?
Unity Investments seeks relationships with investors who are comfortable investing at least this amount.
What is a Subordinated Mortgage Unit?
A Subordinated Mortgage Unit is a mortgage-backed investment representing a share of a mortgage on a property which may at some point have another mortgage registered ahead of it as a priority claim. Over its term, a subordinated mortgage is both a 1st mortgage and a 2nd mortgage.
Why do you offer such high interest rates instead of borrowing from banks?
Unity Builders Group is considered an 'A' borrower by many of Canada's largest banks and does borrow from many of them routinely. Banks prefer to lend construction financing, so Unity looks to private investors to lend for land acquisition, specifically for multi-family (condominium) developments.
How is my investment secured?
Investors in Subordinated Mortgage Units are registered on title to real property as mortgage holders through a legal document called a Trust Indenture. A Trust Indenture sets out the rights and benefits of all investors and is administered by a 3rd party Trustee (usually a Trust Company) who acts as a watchdog for investors to ensure that their mortgage security interest in the property is not compromised. The project cannot be sold or refinanced without first meeting its financial obligation to you.
How does my investment get paid back at the end of the term?
Mortgage backed investments are repaid through the proceeds of selling the properties being developed. Your investment is repaid before any profits are taken by UBG.
What happens if the sale of units is slow, or they don't sell at all?
Our projects are typically required to pre-sell 30% - 50% of the housing units before construction can begin on the project. This establishes the market viability of the project before it goes ahead. Unless or until that happens, our investors remain in 1st position on title to the lands. In the event that a project fails to meet its presales requirement, it would be postponed, redesigned or sold as market conditions warranted.
What happens if favourable construction financing is not available?
Availability of construction financing is a significant risk to investors in any real estate development backed investment. UBG has developed and maintains enviable relationships with many of Canada's largest banks and is considered an 'A' borrower. UBG's track record for performance ensures access to construction financing, however in the event that favourable financing terms were not available, the project would not proceed.
What happens if the builder fails to meet construction financing obligations?
Builder default is a significant risk to lenders. When builders fail to meet their obligations, lenders can foreclose on the project. For investors whose security ranks lower than construction finance lenders this can mean a partial or even a total loss of their investment principal. It is very important for investors to assess the performance history of any builder or property developer they are considering investing with. UBG has never defaulted on a construction loan.
What happens if land is sold prior to the project being built?
Because investors are secured on title to the property, the project cannot be sold (i.e. title transferred to another owner) until investors' claims have been repaid. The Trust Company overseeing your investment will not release the security until your principal and accrued interest are proven to have been paid.
What happens if the progress of the project does not meet bank construction financing criteria?
Banks employ quantity surveyors to monitor a project on a monthly basis to ensure the progress is on track and consistent with the cash advances they are making. If criteria are not maintained, the bank will halt advances until the appropriate corrections are made by the builder.
Can I sell my units if I need the money before the completion of the project?
UI's mortgage-backed investments are term investments, which means the investment is locked in for a fixed period. Investors should ensure they are comfortable with this period prior to investing. Investors can transfer their investment at their discretion and cost, however Unity Investments does not resell investment units on behalf of investors.
If project construction is extended, will I still earn interest and can I get out?
Our projects typically take up to 3 years to complete. In the event they will take longer, UI may extend the term of your investment by a maximum of 12 months, during which you will continue to earn interest. Unity will provide at least 30 days notice of any extension of the investment term, however you must remain invested until the end of the extended term.
Can I reinvest my interest to increase my return?
Yes. Since 2008 all of UI's new investment products feature an option to compound interest semi-annually at the same rate of interest and receive it upon maturity along with their original capital. This allows investors to achieve a higher reinvestment rate than they might otherwise and significantly boost their annual return on their investment.
Will my investment returns ever fluctuate?
UI's mortgage-backed investments carry a fixed interest rate which will not fluctuate over the term of your investment. Even if the term is extended, you'll continue to earn the same rate.
What is Unity's track record for interest and principal repayments?
Unity Investments has a flawless track record for interest payments and has never defaulted on repayment of principal. Since 2002, UI has completed more than 20 similar financings of which 8 have been repaid, 10 are fully subscribed and in good standing, and 2 are currently open for new investment.
How does Unity cover its costs if 100% of my money goes directly to the project?
Unity Investments entire overhead is paid through Unity Builders Group's corporate cashflows which come from building and selling homes in Alberta, Texas and Colorado. In 2007, UBG delivered over 1,100 homes with revenues of approximately $470 million.
If I can't commit to a 3 year term, is there any way I can invest for a shorter term?
Unity Investments offers investments with terms as short as 30 days. Our Account Managers can provide details of all our offerings and assist you in finding an investment that best meets your needs.
How do general economic conditions affect Unity Investments?
UI's investments are secured by residential building projects in Calgary, Canmore and Edmonton and these projects can be positively or negatively affected by the general economic conditions in Alberta. Both Unity Investments and Unity Builders Group management teams have deep industry experience that helps ensure that the projects underlying your investment are well-conceived and well-executed.
The Press reports that both single and multifamily sales are down significantly. What is the impact on Unity Investments' projects?
Slower sales increase the completion time for a project and increase the investors' risk of an extension of their investment term. UI's project-backed term investments are typically 30 or 36 months which is sufficient to complete a project under normal market conditions and operating circumstances. In the event that a project is delayed beyond the original term, an extension of up to 12 months is designed to accommodate extraordinary circumstances yet provide consistent, ongoing security and interest payments to investors.
If Canada is headed for sluggish growth, what impact will that have on the project?
For projects which have not yet begun construction, any slowdown in the economy can be addressed through careful planning of the project's capital budget and ensuring that market risk is mitigated by preselling housing units prior to commencing construction.
People have lost a lot on the stock market, layoffs are happening, and spending down.
Over the last 40 years, the North American economies have endured several economic shocks which have temporarily affected the demand for new homes. Despite these unpredictable periodic events, the demand for new homes has continued to rise due to a combination of population growth, longer lifespans, increasing personal wealth, deterioration of existing housing stock and many other factors. Housing is a basic human necessity and, like food and water, is expected to be in constant demand despite occasional fluctuations.
Do you keep investors apprised of the status of projects?
UI's Investor Services Team is available to answer questions about the status of our projects at any time. In addition, Unity Investments is developing access to project status reports through this website. UI also produces and distributes a semi-annual newsletter to all investors.
Why are your investments only available to residents of Alberta and B.C.?
Registering and distributing investments in all provinces can be costly and is unnecessary given the limited amount of capital Unity Investments is raising.
Where can I find out more about Unity Builders Group in general?
Check out the Company overview section of this website and follow the links to any of Unity Builders Group's individual homebuilder websites. Additional information is available through the UBG website or by contacting our Investor Services Team directly.