Make Money Now: Why You Should Start Trust Deed Investing
Trust deed investing is a great way for investors to invest in a real, tangible asset without having to quit their day jobs and invest in real estate full-time. There are also many ways to invest in trust deeds. Here’s why you should add private trust deed investing to your portfolio:
- You are the banker. You make the rules and you control the risk.
- You legally control the property. If a homeowner misses the payments, the bank will foreclose and get that property back. By investing in deeds of trust you have the same control as the banks.
- As a trust deed investor, you will receive monthly, passive income. Basically, you make money without having to work. That payments are in your hands every month just as scheduled. Essentially, you get paid for making wise investment decisions. What is better than that?
- You will have a team of licensed professionals handling every aspect of your investment business. They will make sure that you are staying on the legal side of being a trust deed investor.
- Investment secured to a real, tangible asset. Trust deed investing is simply investing in loans secured by real estate.
- If structured properly, trust deed investing offers an attractive current yield with relatively low risk. Trust deed investors usually earn high single-digit annual returns, paid monthly. In some cases, returns above 10% are possible. These returns are very favorable relative to other investment options with similar risk profiles. The risk of losing money in a trust deed investment is mitigated by a built in “margin of safety.”
- The margin of safety is the difference between the loan amount, and the value of the underlying property. The core concept of trust deed investing is that if the borrower does not perform, the lender can foreclose on the property and sell it to recoup the investment, plus any past due interest. If the loan is sufficiently conservative, i.e. the property value is high relative to the loan amount, then the investment should not lose money even if the borrower defaults on the loan. A well structured trust deed investment might have a loan-to-value of 65%.
- You have more control over the effects of the real estate market on your investment. The real estate market has ups and downs but because the real estate cycles take a long time to change, this gives you plenty of time to strategize with your CPA and your financial consultant. In traditional investments the market can change in a matter of seconds after the opening bell which makes it volatile. Trust deed investing gives you control.
Trust deed investments in Miami and South Florida can be a fantastic way to earn solid returns and diversify. Find out more here.