Everything You Need to Know About Self-Directed IRA Trust Deed Investing
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Everything You Need to Know About Self-Directed IRA Trust Deed Investing

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Everything You Need to Know About Self-Directed IRA Trust Deed Investing

Real estate investment is a great way to build wealth and equity but buying and managing investment properties is not for everyone. Investors who are interested in non-traditional real estate investing can begin with  self-directed IRA trust deed investing. Trust deed investing is one of the safest high-yield investment vehicles available. Trust deed investing is popular form of estate investment because trust deeds can offer some measure of security against losses.

Diversifying your portfolio through private lending is becoming an increasingly popular alternative retirement investments and you can do this by self-directed IRA trust deed investing. You can earn a passive income from interest while securing your investment with a deed of trust on the property.

These are the pros and cons according to Safeguard Advisors:

Pros:

  • Lower capital requirements than real estate ownership
  • Simple asset without the hassles of tenants, repairs, etc.
  • If the borrower defaults, your IRA can foreclose on the property

Cons:

  • Need to understand lending laws in your area
  • More liquid than real estate ownership, but still relatively illiquid

According to an article published by Fortune, investment expert Tony Robbins stressed the importance of diversifying your portfolio. “Knowing where to park your money and how to divide it up is the single most important skill of a successful investor,” said Robbins. “Effective diversification not only reduces your risk, it also offers you the opportunity to maximize your returns.”

Also, trust deeds are a better than traditional investments because they typically offer better returns. Considering today’s unpredictable economy, a trust deed property can add balance and diversity to your portfolio. Here are some advantages according to The Patch:

  • Higher Returns than the typical investments like CDs, Bonds, Annuities
  • Tangible asset providing a secured investment
  • Investment terms are often relatively short
  • A passive investment option that generates monthly income.
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