What You Should Know: Understanding Trust Deed Investments
Understanding Trust Deed investments does not have to be difficult. Basically trust deed investing is simply investing in loans secured by real estate. Trust deed investments can bring a steady stream of passive income while maintaining the security of real estate. In order to make a wise investment decision, an investor must utilize market knowledge, common sense, experience and patience.
One of the best aspects of Trust Deed Investing is that there are no tenant problems to deal with, no rents collecting, repairs or dealing with contractors. And if the borrower defaults, you take back the property, gain the equity in the property, and repeat the process of trust deed investing again.
First of all, what is a Private Money Loan? A private money loan is a loan made to an investor that is secured by the real estate. This is also called Hard Money Lending when banks and savings and loans will not make the loan but private investors do.
Basically, when you invest in trust deeds you become the bank. What that means is that you are making money the same way banks make their money. These loans are collateralized by a promissory note secured by a recorded Deed of Trust. This makes a trust deed investment a safe and secured investment.
When investing in a trust deed, the investor is buying someone else’s real estate loan, which is secured by a trust deed. When a real estate investor purchases trust deed, they are setting up a relationship as an intermediary between the original lender and the borrower. In Trust Deed investing the name/company name will be on the actual deed as the lender with and ROI of 10% to 12% and interest only payments. This rate will be decided upon by the investor and the borrower and the payments are delivered to the investor on a monthly basis.
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.