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Home / Trust deed investments / Be a Successful Real Estate Investor: Trust Deed Investor Basics

Be a Successful Real Estate Investor: Trust Deed Investor Basics


When it comes to investments, you need to spend money to make money but it can be difficult to find an investment with low risk and high rewards. Trust deed investing is a great way to make money and diversify you portfolio. Also, trust deed investing has very few risks. Here are the Trust Deed Investor Basics.

Trust deed investor basics: Real Estate Trust Deed Investing is when investors invest our money in Trust Deeds secured by real property and insured by a Title Insurance Company. Basically, the investor becomes the bank and they can earn a much higher interest rate than a conventional bank.

With a trust deed investment the investor is acting like a bank by lending money to a borrower. The investor is able to earn a steady stream of passive income while securing those funds with the underlying real estate asset.

Investing in trust deeds provides a steady stream of passive income. Typically, it provides consistent monthly cash flow you can rely on which make it perfect for someone who is interested in investing in real estate but doesn’t want to deal with the hassles. If payments stop, the investor recovers capital by foreclosing on the underlying valuable real estate.

Trust deed investor basics include the three players of trust deeds: the trustor, the trustee and the beneficiary. The trustor is the borrower, the trustee would be the trust deed itself, and the beneficiary is the investor, who is investing in the trust deed. It is important to always make sure the trustee is reliable. Both the beneficiary and the trustor should ensure that the trustee would be reliable and accountable enough to avoid unnecessary risks.

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.

Investors can enjoy a consistent stream of passive income in the form of monthly interest payments on their invested capital. Returns are considerably higher compared to other fixed income investments. Real estate collateral is often viewed as more secure than stocks and equity investments, because its value can never diminish to zero.

Trust deed investments is a great way to generate a steady stream of passive income with relatively low risk. Find out more by contacting specialists at HML Investments.

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