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Investment Information: Who Can Invest in Trust Deeds


Investment Information: Who Can Invest in Trust Deeds

Investing in trust deeds is a great way to diversify your portfolio and generate a steady stream of passive income. These are the types of investors who choose to invest in trust deeds:

Investing from IRA funds

A trust deed financial agreement between a borrower and private investor in which the promissory note is backed by a deed of trust recorded on the property. The borrower promises to pay an agreed upon interest rate on the loan and must repay the initial amount at a specific time. If the borrower defaults on their loan obligations, the IRA owner will take possession of the home once the property goes through foreclosure. While investments inherently involve risk, trust deeds may offer an IRA owner the opportunity to recoup a portion or all of their original investment through the sale of the property.

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. Luckily for those who are not interested in the hassles of flipping houses, traditional real estate investing is not the only route to take. You can invest in trust deeds with a self-directed IRA and trust deed investing is a widely used for of real estate investment that provides flexibility and security.

Individual investors

Private investors use personal savings for Trust Deed Investing. When structured properly, trust deed investments can yield returns that are far superior to most savings accounts or certificates of deposit. Relatively low risks, investment portfolio diversification, and measurably higher yields are all attributes of trust deed investments.

Because trust deed investments are secured by real estate, your money works harder and smarter without the risking drops in interest rates and returns. Trust Deed Investing is a tried and true method of creating a steady stream of fully collateralized, passive income.

Some investors choose to personally source individual loans and lend money directly to real estate investors while others choose to purchase loans backed by real estate from brokers or invest in a fund that invests in trust deeds. Many individual investors choose to use funds and brokers because it gives them access to professional real estate investors that are investing on their behalf based on the specific investment criteria the individual investor has set.

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