First and foremost, what is trust deed investing? Trust deed investing is defined by the investor having their name on the deed of trust for a property. So what do you, as the investor need to do to be successful in trust deed investing? Research is the biggest thing that needs to take place before you do anything.
Why is this the best option for you? What are your other options in regard to investing in a property? What makes this a better option in lieu of hard money investing? Trust deed investing basically allows you to invest in a loan that is backed by real estate. Most of the time these types of loans only last for about five years. Usually, there is a promissory note that states the intent to pay back the money owed. Some can be paid off in as little as two years. Typically the interest of the loan that is issued is around 7 to 12 percent.
If you are trying to invest in California there is a document, called the deed of trust, that verifies the owner of the property. This is useful when payments are not being made to the lender. Once everything is varied the deed of trust becomes public record. When you are considering trust deed investing any form of payment is accepted for the loan that you are applying for.
So why should you consider trust deed investing? If you are borrowing, trust deed investing challenges you to find the highest quality real estate as possible. This means you have to do your due diligence when looking for the right property. If you are looking into buying a home it should be one that you can see making a profit fairly quickly. This pushes you to make better decisions when you are looking for a potential investment. If you are lending the funds for the investment, trust deed investing gives you the power to foreclose on the property to recoup your money.
When you take this type of investment there is more transparency as well. For example, when you are applying for a loan depending on the value of the property that you are trying to resell determines your loan. Lenders also have a lot more control over what happens is the borrower were to default on the loan.
Short answer yes you will. But with all commercial real estate investing there are certain things that you have to look out for. In some cases, it may be better for you to apply for a traditional bank loan or a hard money loan from a reputable lender. Always way your pros and cons when attempting any type of investments.
Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true.
Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.