The wonderful world of trust deed investing is on the rise. Of course, if you are like most people, you are probably asking yourself, if that is such a good thing? Well, if you are worried that California private hard money is going anywhere, you can stop. Trust deed investing, if anything is more of an add-on to California private hard money.
But, do not take our word for it. Instead, do even a cursory review trust deed investing and you will see that most private or hard money financing is funded via a trust deed investor, at least as of late. So, what does all of this mean for you, the potential borrower? Well, there is more good news and some bad news. Let’s start with the good news, for starters, an influx of trust deed investing means more financing obviously or rather more loan approvals.
The bad news is that even though your future hard-to-finance commercial deals and business ventures are subject to a new kind of bank. In other words, trust deed investors are the new people to please. What this means for your bottom-line is that if you fail to meet your commitments as a borrower, your trust deed investor can, essentially, foreclosure on your property in order to recoup their losses. This may seem like standard business, but the reality is that if you obtained financing through a non-trust deed investor you would incur interest and applicable penalties. So, now that you know what these guys are all about, why not find out who you are actually dealing with?
When it comes to trust deed investing, not just anyone can be an investor. In fact, there are clear guidelines as to who can invest in trust deeds. Nevertheless, it is still important to note that the list is not overly exclusive. Thus, you will quickly learn that private individuals, corporations, foundations, pension plans, LLCs and more can invest. However, those individuals that using retirement funds are often limited in the amount they can offer. Similarly, the law requires that no single trust deed can be more than 10% of that individual’s or entity’s net worth. Of course, this yet another provision that has the investor’s best interest at heart, but it is still important information to know.
Ultimately, this is just a small fraction of the information about there about trust deeds and trust deed investing. Therefore, it is highly recommended that you do your own research and more than just a cursory review of private hard money financing. With that being said, if you need some assistance with finding more information, you can always start with the California Department of Real Estate (DRE). There you will find entire documents covering almost every possible question you can think of when it comes to this particular avenue.
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.