What is Trust Deed Investing?

Palm Desert CapitalSo, what is trust deed investing? Good question.

Trust Deed investing is the lending of money with real estate as collateral. In California, most loans against Real Estate are called “Trust Deeds,” after the name of the legal instrument used to pledge their security. With expert guidance from Palm Desert Capital, anyone can successfully invest in trust deeds. This contrasts with most other investments where extensive study and years of experience may be necessary before you can invest with confidence. Trust Deeds are safer than most other investments of comparable yield because the risks are identifiable. Many investors, especially retired people, also enjoy the relatively minor effort needed to manage the investment once their money is in place.

Palm Desert Capital’s team of highly experienced Real Estate professionals makes this investment as stress free as possible. We have professionals with over 20 years experience in mortgage lending, licensed appraisers and a staff of attorneys with over 30 years of legal experience.  This expertise within Palm Desert Capital protects your investment.

The typical trust deed investor is a person looking for a competitive return on their investment. The interest rate the borrower pays is generally higher than the borrower would pay at a bank. The investor in turn, receives a higher return on his investment. Additionally, the money that is loaned is secured by the borrower’s equity in their real estate. The security, the good return, plus the monthly cash flow, make trust deeds an excellent investment vehicle.

Palm Desert Capital receives many calls every day from borrowers, realtors and mortgage professionals who are looking for private money for a real estate transaction. It is Palm Desert Capital’s job to fund loans with investors’ capital.  Then, after the loan is funded, it services the note, collecting the payment each month and sends the investors a check every month. Investing in Real Estate made simple.

What is so special about our trust deed investments is that most opportunities are in the local Southern California area. That way, before any money is lent, Palm Desert Capital will physically see the property, interview the borrowers, and have a professional appraisal completed by a licensed real estate appraiser.  Moreover, the investor places his/her capital in a property that they have actually viewed and know exists.

Why is trust deed investing safe with Palm Desert Capital?
The basic premise of safe trust deed investing is to make sure that the property (collateral) is sufficient in case the borrower does not make their payment, and Palm desert Capital and the investor have to foreclose on the property. Palm Desert Capital’s motto is; “We only loan on something we would want to own.”

Consequently, there is a healthy safety net, in that the loans are only in first position with a lot of equity. So with the low loan-to-value, Palm Desert Capital can help the investor get all their money back plus interest. “Loan to value” is simply the loan amount divided into the value of the property. Here is an example: a client calls and needs a loan for $150,000 on a property valued at $300,000. In this scenario, the loan to value is 50%. This means that if the borrower were to default on their payment, there would be approximately $130,000 left over (Back payments to the investor would be added to the pay off). Palm Desert Capital lends up to 60% loan to value.

The fact that this investment is secured by real estate is what makes trust deed investing so attractive to both experienced investors and new investors as well.

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