So, you’re interested in investing in deeds of trust? We’ve got over 20 years of experience doing just that, so we’ve compiled a list of dos and don’ts to help guide you.
Everyone wants to dip their toes in the real estate market. This is in no small part due to the fact that it’s everywhere. There are countless TV shows about flippers, podcasts about rehab projects and seminars every week telling you how to get rich with fix and flips. Trust deeds let you cash in on this craze without taking as much risk. How? All of these flippers need funds to buy properties and they’re living up by the droves to apply.
You can be the one to lend to them, but there are a lot of dos and don’ts you should pay attention to if you want to protect your investment.
● DO make sure you love the property. Make sure you physically check it out yourself; this means kicking the tires by crunching the numbers, looking at comps and examining the property yourself. If it feels right and the numbers make sense, it might be worth it.
● DON’T lend to relatives and friends. Lending to relatives and friends (even the most well-intentioned) is a great way to lose your money and your friends.
● DO look for experienced people. If this is a fix and flip, make sure they know what they’re doing. Have the flipped properties before? Did they make a profit? Did the flip stay on target, both budget-wise and time-wise?
● DON’T lend based on a projected future value. No one knows the future and even though all signs point to a rosy outcome, that doesn’t guarantee anything. Only loan based on the current value.
There are many things you can do to help protect your investment and going through a broker is one of the best. The broker can help bring you candidates for investing in deeds of trust. Even better, they can help vet the candidates, making sure they have relevant experience, they have chosen a good property and they know what they’re doing.
At Level 4 Funding, we have multiple decades of experience with investing in deeds of trust in Arizona. Our track record speaks for itself. Give us a call or get on our trust deed newsletter to be the first to hear about new deals.
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 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.