Topic: How To Invest

Thanks you for your investment advice. Please comment on Firm Capital Mortgage. Thanks.

Article Excerpt

Firm Capital Mortgage Investment Corp., $12.63, symbol FC on Toronto (Shares outstanding: 14.5 million; Market cap: $183.7 million; www.firmcapital.com), provides predominantly short-term residential and commercial real estate financing to developers through its mortgage banker, Firm Capital Corporation. This includes short-term bridge loans, as well as construction and mezzanine financing. These loans generally entail higher risk. For example, mezzanine financing is a mixture of debt and equity financing that private companies use to fund their expansion. Mezzanine debt gives the lender the right to convert the debt to equity if the borrower defaults. Mezzanine financing typically entails less due diligence by the lender, and the borrower puts up little or no collateral. First Capital’s 7.4% yield reflects that higher risk. We don’t recommend Firm Capital Mortgage Corp. …