Minimising Risk

Minimising Risk – Making Smart Loan Decisions

In order to evaluate the viability of a loan and loan terms, we require extensive information from all potential borrowers

Minimising Risk – What if Interest Rates Rise?

All Hazelton first mortgages are written in such a way that the interest rate paid by our borrowers rises with the prime rate. Thus our mortgage investors need not be worried about being locked into a fixed return when interest rates are rising. Mezzanine interest rates however do not vary and are fixed for the term of the loan.

Minimising Risk – What Happens in the Event of Borrower Default?

Recognising the realities of the business world, there is always a small percentage of borrowers who default. Hazelton Financial is able to minimise risk to our investors in the event of such occurrence thanks to the resources and skills at our disposal. These resources encompass both legal and property management.

Legal Services Experience

Our affiliated law firm, Walton Advocates, has substantial experience with default situations. Our law firm has:

• collected mortgage arrears;
• written demand letters;
• negotiated, mediated and arbitrated mortgage matters;
• commenced court actions against delinquent borrowers;
• commenced non-payment of rent and eviction proceedings against delinquent tenants;
• obtained certificates of pending litigation against properties;
• obtained power of sale of properties; and
• obtained foreclosure on properties.

Walton Advocates has represented owners, developers and financial institutions in site acquisition, project finance, entitlements, and with planning and construction of retail, commercial, residential and industrial projects. They have furnished legal services to institutional and non-institutional owners of commercial and multi-family residential properties in issues pertaining to ownership, operation and management (including leases, financing and commercial unlawful detainer actions).  They have represented clients in purchase, sale and finance transactions of improved and unimproved real property.  They have substantial experience in real estate workouts and judicial and non-judicial foreclosure.

Property Management Experience

In the event of a default by a borrower, property management expertise is available through our sister company Hazelton Property Management Ltd. Properties under management of Hazelton Property Management include the following:

• Residential Apartment Buildings
• Retail Properties
• Commercial Buildings
• Multi-Use Buildings
• Real Estate Development Projects

Hazleton Property Management services include:

Property management

• Operations and management of multi-unit commercial, multi-unit residential, retail and industrial properties
• Short- term and long-term strategy to maximize return on investment
• Tenant relationship management through ongoing communications and reporting
• Tenant retention strategy and effectiveness measurement
• Administration of leases to optimize results
• Market research for competitive pricing and positioning
• Maintenance and management of the property
• Twenty four hour on-all emergency repair
• Rent collection and lease enforcement
• On-site staffing, if needed, according to owner approved budget
• Maintenance and capital improvement planning
• Regular property inspections
• Insurance management and advice on appropriate coverage

Leasing services

• Obtaining tenants
• In-house leasing team with extensive industry contacts
• Advertising vacancies
• Negotiating new and renewal leases
• Marketing strategy to promote properties to prospective tenants and brokers, through our network of contacts, Web sites, printed media and other channels of communication

Accounting

• Centralized accounting and finance functions, including financial statements and audit, accounts receivable, accounts payable, payroll, cash and tax management
• Weekly occupancy and collection reporting
• Monthly financial report
• Annual budget preparation:
  
  Unit turnover costs
  Capital expenditures
  Operating and labour costs
  Revenue

• Partnership distributions as directed

In summary, Hazelton Financial is able to minimise risk to our investors in the event of default thanks to the resources and skills available to us.