Up until three years ago, many investors were not clear on how trust deeds played a role in private hard money. California, however, wanted to make sure that all potential investors understood the trust deed investing guidelines. Thus, it was not too long before the California Bureau of Real Estate decided to release new guidelines. In these new guidelines, it became apparent that in order to invest, one could not invest more than a fraction of their net worth—10% to be exact.
In addition to this new provision or rather clarification, it also became apparent that there were several advantages to this particular form of investing. For starters, trust deed investing meant more private hard money. California investors, brokers and borrowers all benefited from this fact. Another clear advantage was the fact that this particular form of investing meant a consistent income stream for investment portfolios in need. Furthermore, trust deeds are, in essence, separate from the stock market. The separation between the stock market and trust deeds means that there is less risk associated with this form of real estate investment.
Other important advantages were clear from day one such as the predictable principal and interest payments that you as an investor would receive. It is also very hard to discuss the advantages and expectations of trust deed investing without highlight the fact that your investment is secured via tangible collateral (the real estate or property). This not only means that you have a viable cause of action if the borrower does not live up to their end of the agreement; it also means that your investment has clear equity.
With that being said, let’s not forget why you are really here—you came here to make a sizeable return. Well, the good news is when you choose to become a trust deed investor you more than likely will see a sizeable return. In fact, many trust deed investors have been known to earn double-digit returns all through investing. So, what does all this mean for you? It means that there is an opportunity to earn more while risking less and that is a win-win in really anyone’s book. Lastly, there are dozens of ways to invest wisely when it comes to trust deed investing. For instance, you should always determine a safe amount to lend and you should always make it a point to establish the property value. These are just two ways that you can risk less. Remember, all you have to do is just ask around and pretty much anyone will have a tip or two, especially when it comes to first trust deed investments.
Ultimately, if you are interested in learning more about trust deed investing or you are just curious about those helpful tips, do not be afraid to also speak with a reputable broker.
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.