Make a Smart Investment: Trust Deed Investments Explained
Trust deed investments explained: Trust deed investments can be a great way to invest in real estate without dealing with the hassles of being a landlord. Here is everything you should know before you begin:
What is a trust deed investment?
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.
What is a trust deed investor?
A trust deed investment is when an individual lends money to a borrower through the services of a broker. With a trust deed investment the investor is acting like a bank by lending money to a borrower and the loan is secured by real estate. The investor is able to earn a steady stream of passive income while securing those funds with the underlying real estate asset.
Where does this money come from?
You can use savings, credit lines, or retirement accounts. The process is simple, the broker finds the borrower and then they find the lender who provides the funding. The broker is the middleman who takes care of the technical aspects.
Can I use IRA funds?
Yes. 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
Is it secure?
Because the property serves as collateral for the investment, investors will take possession of the property in the event of a default. They can then sell the property in order to recoup the investment. This means that you have absolutely minimal risk. Peace of mind can be illusive when it comes to investments but trust deed investors can rest easy lenders knowing that their investment capital is secured by real estate.