What Makes a Trust Deed Investor?
A deed of trust is a form of secured transaction commonly encountered in the world of real estate. Let the following insights inform your decisions as you work with these investment vehicles.
In deed of trust transactions, investors serve as lenders. By originating real estate loans using their private funds, these parties may be able to realize lucrative returns.
Deed of trust investors may profit because they can demand higher interest yield than a financial institution would. A third-party trustee assumes control of the borrower’s interest in the property. If the borrower defaults, the trustee can remedy the situation on the lender’s behalf.
Are There Minimum Capital Requirements?
In California, would-be deed of trust investors must follow the 2013 SB978 laws enacted by the state’s Bureau of Real Estate. This rule blocks you from investing more than 10 percent of your total net worth in a single deed of trust. You may, however, invest greater fractions of your net worth in multiple deeds at your discretion.
What Kinds of Properties Do You Lend On?
Not all forms of real estate equity represent equally viable sources of lending security. We choose assets that maximize our clients’ chances of generating positive returns and minimize their risks.
Secured Capital Lending currently restricts its trust deed lending to non-owner-occupied homes in California. Although this encompasses a range of individual properties, we concentrate the bulk of our activities on units with less than four habitations and single-family homes, including new construction, long-term hold and fix-and-flip residences. We reserve the right to change our strategies to accommodate market conditions and provide better services.
Are Deeds of Trust Safe Investments?
No investment is without risk, but deeds of trust features more security than most others . Working with Secured Capital Lending gives you a trust deed for a real-world asset in California. You retain the power to take profitable actions like renting out or selling the property.
What LTV Rates Do You Work With?
We’re happy to loan as much as 60% to 65% of a property’s appraised value. We also maintain a long-term rental program with already-repaired properties, and we’re willing to offer similar loan-to-value terms for these assets. Our lending specialists may consider factors like a property’s type and location, your experience as an investor and the nature of any necessary repairs.
Frequently Asked Questions
Q. What is a trust deed investor?
A. A trust deed investor is a person seeking a competitive rate of return by loaning private funds on real estate. In short, you’re the bank. The loans are secured by real estate. A trust deed investor makes a higher interest yield than would typically be obtained by a regular bank and is secured by the borrower’s equity in the real estate transaction.
Q. Is it safe?
A. Every investment has risk. However, unlike many other investment vehicles, trust deed investing with Secured Capital Lending ensures you own a first trust deed on a specific California property. This means you have ultimate control and a physical asset that can be sold or rented out.
Q. Who can invest in trust deeds?
A. Private individuals, corporations, pension plans, 401Ks, custodianships, LLCs, retirement funds, IRAs, Roth IRAs, Self-Directed IRAs, Charitable Remainder Trusts (CRTs), Foundations, endowments, family trusts, family members, and SEP accounts. Some retirement amounts have limits so please check with your custodian or agent. The Bureau of Real Estate simply requires that no single trust deed can be more than 10% of your (or an entity’s) net worth.
Q. Will I be given a complete profile on the property?
A. By the time we present the property for funding, we’ve already had an independent appraisal done on the property. We’ll send to you a copy of that appraisal along with the address for you to view the property.
Trust Deed Investing
Never let someone else define your role in the lending process. With Secured Capital Lending trust deed investment assistance, you can become a vital source of private money for regular borrowers and high-flying investors alike.
Our trust deed investing expertise ensures that you can make loans effectively and lucratively. By guiding you through the nuances of funding other people’s real estate dreams, we help you tap into a high-interest source of viable investment income that gives you the power to do more with your property equity.
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Invest in Trust Deeds
Secured Capital Lending funds mortgages for real estate professionals and makes them available to you as fractional notes, meaning you can buy a portion of the mortgage. You can either choose individual notes based on risk and return levels or let AutoInvest do the work for you by selecting a conservative, aggressive, or all-notes strategy. Put as little as $5,000 into each investment.
Start Earning Interest
Borrowers will repay the loans you’re invested in on a monthly basis. You own a portion each loan you’re invested in and will receive a share of each payment. Log into your investor dashboard at any point to see how your investments are performing and summarized statistics for your portfolio.
Receive Final Payment
Your loan will be fully paid back in 12 months or less. If anything goes wrong, Secured Capital Lending will take care of all servicing needs and, if needed, foreclosure—remember, your investment is backed by a real asset. Once the loan has been repaid, all funds will be returned directly into your online account where you can withdraw them or reinvest to keep earning returns!
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