The investment in first trust deeds involves lending money against a deed secured by a property. The transaction is handled like every other standard real estate transaction and involves escrow, title insurance and all other manners of financial safeguards for the lender.
Why Trust Deed Investing is Safe :
Any prudent investor should thoroughly investigate and carefully consider the benefits, especially the safety, of trust deed investing. These financial instruments offer several outstanding features:
- Outsized returns for the risk involved
- Guaranteed yield
- Fully securitized loans backed by a real asset
- Loans based on a 60-70 percent loan to value ratio
- Experienced management of the loan
California trust deeds investments can offer high returns with low risk. Trust deeds are similar in function to traditional mortgages. The primary difference is that while mortgages involve only two parties, a borrower and a lender, trust deeds involve three: a borrower, a lender and a trustee. The trustee is a third party who holds legal title to the property in question on behalf of the lender until the loan is paid in full. In the event of default, the lender can take possession of the property. Investors can invest in trust deeds either by directly making a loan or by purchasing an existing promissory note.
Reasons To Invest In Trust Deeds:
Here are the top 10 reasons Investors choose to invest in Trust Deeds:
- Trust deed investing offers an unusual combination of high returns and consistent cash flow with a secured investment. Investors receive monthly interest payments on their invested capital as they would with a fixed income investment or money market fund, but the yields are typically higher.
- Trust Deeds are secured by property, so the risk is low.
- Yields are higher compared to other fixed income securities. Real estate collateral is often viewed as more tangible than stocks and equity investments.
- Trust Deeds also offer a vehicle for investing in real estate without the need to manage property. They’re an excellent way to diversify a portfolio.
- Relatively secure and predictable, and returns beat inflation significantly.
- Monthly growth rebuilds wealth.
- Simple and transparent. Unlike publicly traded real estate related securities – e.g., CMO’s, MBS’s, REIT’s – Trust Deed Investments are straightforward and easy to understand.
- Trust Deed Investing is like Real Estate investing without the hassles of ownership - and with the benefits of relative liquidity.
- Trust Deed Investors can diversify into real estate without acquiring that expertise – or learning the hard way.
- Trust Deed Investors can diversify across multiple RE projects with relatively small investments.
To learn about current California trust deed investment opportunities, please call Russell at 415 680 3454, or check out current listings online at http://www.equitycoalition.com/invest/trust-deed-offerings/.