INVESTING IN DEEDS OF TRUST: If you are considering investing in Deeds of Trust as a diversification to your investment portfolio, here are some basic facts that you should consider prior to investing:
PRIOR TO INVESTING IN DEEDS OF TRUST, our firm will provide you with a comprehensive overview of the proposed transaction. In your loan package you will receive:
- Deeds of Trust, as investment vehicles, when properly underwritten by experienced mortgage professionals such as the individuals in our company, are a safe, shorter term, high yield investment. As an investor in Deeds of Trust, you are the Lender on Real Estate owned by the Borrower (much like a Bank)
- Deeds of Trust are much like mortgages, but are easier to understand; to invest in; and to enforce. Typically, Deeds of Trust secure a Promissory Note. They are recorded liens given by a borrower to a lender on a parcel of real property. The real property can be anything from a single family residence to a commercial building to a vacant or partially improved parcel of land.
- As a Lender of a properly recorded Deed of Trust, you receive the following benefits:
- High Yields (Interest Rates vary by loan request)
- Monthly income
- Multiple layers of protection and insurance of your lien position (all of your funds are handled by licensed and bonded parties)
- Equity cushion to protect your investment (lend generally 70% or less of the property’s value – if improved, and 50% or less on land)
- Preservation of your principal and low risk of loss (because of the low loan-to-value underwriting and interest only payments, your funds are protected and your principal remains in tact)
- Each month we are presented with dozens of investment scenarios from borrowers all over the state. Only a very select few pass our requirements and criteria to become a viable investment for our investor clients.
- Additionally, we encourage you to engage in your own due diligence and review before investing in this or any other investment. While no investment is completely free of risk, we take every foreseeable precaution to try to ensure that investment risk is minimized, while investor return is maximized.
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- Narrative Summary of the proposed loan transaction
- Detailed Application of the borrower
- Appraisal, or other independent valuation of the property
- Credit profile on the borrower
- A description of the property and transaction
- A detailed analysis of the proposed loan and loan terms
- Color pictures by one of loan professionals who have inspected the property prior to preparing the loan proposal
- Borrower’s ability to service the loan
- The borrower’s strategy for full re-payment when the note all due
- All other relevant information depending on the transaction