Question 1: Like the rest of the pack, I'm seeking a higher return for my super fund with calculated risk. Prudent first mortgage companies appear to be the best bet (maybe there is better?) but I'm unable to find out much about these companies, as I just can't get past the promotion to find any history. I'm unable to check out these companies on the internet or anywhere, and those big ads don't count! I'd like to deal with companies who have survived the GFC, not the ones who have sprung up in the meantime, as I suspect when and if the next big recession hits, the newbies will be first out the door. What can I do?
Answer: Firstly, I would be a little more circumspect about investing in first mortgages or mortgage funds. They are not always what they seem – and that is why the interest rate can be so high! It can be very expensive to take possession of a home, and in the case of a development/construction, defaults typically occur in the middle of the construction – and it can be very costly, and take many, many months, to finish the construction so that you can sell the property and realise the security.
If you are planning to invest in a mortgage fund, read ASIC’s paper on these and the benchmarks they have developed to assists investors (see https://www.moneysmart.gov.au › media › investing-in-mortgage-funds)