Trust deed investing is a great way to generate income from real estate investments without having to deal with any of the hassles of purchasing a home, refurbishing it, and reselling it. Trust Deed Investing is when investors invest our money in Trust Deeds secured by real estate. Basically, the investor becomes the bank and they can earn a much higher interest rate than a conventional bank. In the current economic climate, savvy real estate investors are purchasing properties at foreclosure sales for bargain basement prices, refurbishing these properties, and reselling them for a profit. These house-flipping investments take a matter of months which means hard money loans are perfect for these types of investors. Trust deed investors help these real estate investors get financing and make a profit and the trust deed investors make money from the interest rates. Here are three reasons why this may be right for you:
- Common Sense
Traditional lenders have strict regulations and policies which require potential borrowers to jump through hoops in order to be approved. It is much easier to be approved for a hard money loan. Hard money loans allow for common sense decision-making.
Experienced trust deed investors should feel secure in their trust deed investment because it is real estate based. In addition to helping Diversify Investment Portfolios, trust deed investing also allows investors will also find that the terms of the loan can be flexible. They can negotiate the interest rate, the length of the loan, the late fee, the default interest rate, and the fees.
While the stock market can be volatile, investors can Diversify Investment Portfolios and find control in their investment decisions when it comes to trust deed investing. Investors can tailor their investments to their investment objectives and comfort level. Trust deed investments give investors control and security.
- Passive Income
Trust deed investors receive monthly payments at the agreed upon interest rate. These payments can be structured in various ways. One is partially amortized monthly payments containing interest and some principal; another is with a balloon payment balance delivered at the end of the loan term. When the borrower pays off the loan or the loan term expires, the investor receives payment for the principal investment and any remaining interest owed.
If you decide to start trust deed investing, you stand to make money when the borrower pays back the loan in full or if the borrower defaults on the loan and you foreclose on the property in order to recover your investment.