Lenders
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New Lender Introduction
The typical trust deed investor is a person looking for steady, above-average (12-18% APY) returns on their capital investment. Most trust deeds brokered by us are short-term. The ability to buy or sell existing trust deeds allows for flexibility and more liquidity than other high-yield investments.
Trust deed investing is the loaning of money with real estate as collateral. Loans are secured by equity in real estate but are not insured or guaranteed. The key to a safe trust deed is to use a broker whom has strict loan to value (LTV) requirements for loan approval.
The interest rate that our borrowers pay is higher than the borrower would pay at a bank. The Lender (you), in turn, receives a high interest return on your investment. In addition to the interest you collect on your trust deed(s), an origination fee is also due and payable to you at the close of escrow.
To provide you with a high degree of security and collateral protection, we maintain a conservative loan to value ratio. Rarely does a loan exceed 65% loan to value. Our LTV considerations include any senior loans.
The conservative loan to value means your investment has built-in value and security. Should a borrower fail to make his payments, you may own real estate worth more than the value of your investment.
Funding a new Trust Deed
Investing in Notes and Deeds of Trust is a compliment to any investment portfolio.
Trust Deed investments earn more interest than other investments.
Most of our Trust Deeds are in first lien positions.
You receive regular monthly payments.
Each Trust Deed is secured by real property in California.
Trust Deeds are suitable for IRAs and other retirement accounts. Many private pensions, family trusts, and corporate organizations purchase trust deeds.
Each Deed of Trust is title insured by a major Title Insurance Company.
All Trust Deeds are independently serviced by nationally owned title companies.
Why a Trust Deed Investment?
We offer Trust Deed investments with interest rates above prevailing market rates. Some borrowers are willing to pay higher interest rates for fast loan decisions and fast funding. Typically the borrower has a short term need, and is therefore willing to pay a higher rate.
Approving a Borrower:
We originate Trust Deeds with borrowers who are referred to us from past clients and from brokers in the mortgage industry that cannot offer the borrower conventional lending options.
Approving a Property:
Market value is determined either by comparable sales in the immediate area or by appraisal. Further analysis of the property includes marketability, resale time, and acceptable risk relative to growth, condition, and location.
Protecting Your Money:
When originating a Trust Deed, a title search is obtained and a title insurance policy is issued in the amount of the Trust Deed, ensuring that you, the investor, have a good, marketable lien on the property.
When purchasing a Trust Deed, your funds are made payable to an independent title company. The borrower makes payments directly to you.
Penalties and Late Fees for Late Payments:
Our Trust Deeds have a penalty for late payments. If the borrower’s payment is more than 10 days late, the borrower incurs a late charge, typically at a rate of 10% of the payment. Further, on most properties if the borrower fails to make a payment for more than 30 days, the interest rate accelerates to a higher default rate, typically between 17% and 19%.
Selling a Note and Deed of Trust
The value of a Note is highly dependent upon the following factors:
Amount of cash flow (payments)
Frequency of payments
Remaining term of the Note
Loan to Value
Lien position
Because each Note is a unique transaction, it is important for us to read the original terms of the Note you wish to sell and to complete a property profile.
Acceptable Notes
We buy Notes secured by real property in California. Properties include single family residential, 2-4 units, land, small commercial properties, apartments, subdivisions, condominiums, and residential lots.
Each Note must have regular monthly, quarterly, or annual payments.
The maximum Loan to Value may not exceed 65% of the market value of the property.
We do not accept Notes secured by anything other than real property. For example, we do not accept loans secured by business property or equipment.
We are direct buyers of Notes and Deeds of Trust. Want to sell your Deed of Trust and Promissory Note? Need a fast, fair quote? Call us directly at 619.933.7117.
