Setabay Private Hard Money Lender: investing in trust deeds
Showing posts with label investing in trust deeds. Show all posts
Showing posts with label investing in trust deeds. Show all posts

Wednesday, November 23, 2016

What makes trust deed investing appealing and scary to most people?

There are few investments that give you the feeling of uncertainty along with excitement. Trust deed investing will give you that throughout the entire process. Yes, these types of investments can be very risky, but the payoff would be very profitable if all parties were able to follow through. The article will explain why some are reluctant and some are willing to take on trust deed investing.

house moneyOver the past few years, the real estate business has made a resurgence throughout the United States. While there are many new properties and developments that are being made, one must wonder, are there any ventures that seem very risky from the outside.

You do not have to look any further, trust deed investing has taken on that risky role to many people that are in the real estate field. In fact, many banks and other financial institutions can be a little apprehensive when it comes to investing in trust deed partnerships. But, why is this? There are risks with other properties and projects, right?

Well, for many banks, the biggest thing that turns them off is the short lifespan of the loan itself. Usually, borrowers that are looking into trust deed investing want a short term loan. Often these loans, judging by the reliability of the borrower, could be paid off a year or two after being financed. Most banks want to find investments that will have longevity. Most of the loans that are lender by banks have a 30-year payment plan.

So what attracts people to trust deed investing?

Time is the main factor that attracts people to trust deed investing. Generally, banks will take an extended period of time to do a thorough check on your credit and prior investments. Most of the time when investors are looking to flip homes they want to do it fairly quickly. Most of the time the funding period only lasts one to two weeks before the property is placed back on the market. In the flipping business, the competition can be pretty steep so you must move as soon as possible when you find a potential buy.

So how do you combat this? You go to hard money lenders that are willing to cut out a lot of the time-consuming elements. You do not need to have the best credit score to get a loan from a lender for your investment.

On top of time management, you will get a nice return with trust deed investing.

That’s right most investors, when they have taken the right precautions will on average be able to get a 10% return. You will not always get that, but for the most part, you will be successful if the market is forgiving.

This type of investing is also very popular among people that have creative or unpredictable sources of income. With all these factors, trust deed investing is a great option for those who want the freedom to move from investment to investment with a degree of safety.

Level-4-Funding-Dennis-Dahlberg-Mort[1]Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
http://www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

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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.

Tuesday, November 22, 2016

What are the parties involved with trust deed investing?

Trust deed investing involves multiple people to make an investment work seamlessly. With normal real estate investments, you may take on the venture by yourself if you feel up to it. Sometimes you may need a partner that is willing to invest the time and money with you. However, with trust deeds there are multiple parties that you should be aware of.

img_16-150x150The first thing that you must realize when you decide to take on trust deed investing is that you will be dealing with people whether you like it or not. Certain processes or plans may take longer than expected or you may have to jump through a few more hoops before you are able to reach your finish line.

The big three that you will most likely fall into will either be; trustee, borrower or lender. The borrower and lender should be fairly simple to distinguish for the novice investor. The lender hands out the loan. This will usually be a hard money lender or a financial institution. Borrowers are the people or partners that need funding. Where some people get confused is the trustee. In California, by definition, this person holds the deed of trust for the security of the loan. In the event of a foreclosure, they are also giving the authority to sell the property to recoup money lost from defaulting.

In trust deed investing, the trustee has a lot of importance.

As stated before regular commercial real estate ventures only involve two parties. When a trustee is included you are able to have a mediator that is able to maintain the property title. This also means the trustee is the sole owner of the actual property unless the borrower was to default on their loan. The law requires the trustee not be affiliated with either the borrower or the lender. That being said, the trustee and be a single person, group or even a business.

Neutrality is one of the biggest things a trustee needs to be worried about. Throughout the entire the agreement it is the trustee’s, job to make sure that they do not favor one party over the other. This can cause friction between everyone if the trustee were to favor the borrower’s situation and vice versa. The trustee is also responsible for making sure the title of the property is transferred to the borrower after the payment period is completed.

In trust deed investing the trust also handles the foreclosure.

Of course, the trustee cannot officiate the hearing if there was a trial that was to take place. It is the job of the trustee to handle the Notice of Default. Many people think that this duty is given to the lender, not true in this case. It is the job of the trustee to take care of the foreclosure from beginning to the end. Most of the time it is the trustee’s obligation to get as much revenue from the sale of the property to make sure the lender’s loss is covered.

Level-4-Funding-Dennis-Dahlberg-Mort[1]Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
http://www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

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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.

Monday, November 21, 2016

How can a lender tell if a borrower is reliable for trust deed investing?

As a real estate lender, you will have hundreds of potential borrowers that will need your financial help. What sets certain borrowers apart the masses that file into your office? In trust deed investing how do you choose which venture will be the most profitable? There are certain characteristics that you should look for when vetting a potential client.

If you are reading this you are probably having a little trouble deciding between a handful of potential clients. You have come to the right place for advice. Hooray for you. In all seriousness, when it comes to trust deed investing you will have hundreds of different venture that will pique your interest. One month it could be the duo that wants to open a local hostel in the neighborhood. The next could be the moonlighter that wants to get their hands in the business.

Who ever it is, there is a litmus test that you should follow before making your decision on who you give your money to. For example, say you have a client that wants to open a boutique that will require a $800,000; they have a nice shiny and well thought out business plan for breaking into the market. The one hiccup that you find is the property value. When you correctly check you find that the property is only worth $300,000.

Since the margin of safety will not be able to cover the loan, this investment may not work in your favor if business were to hit a rough patch. Of course, you can take the investment if you believe that you will be able to make a return on your money. On the other hand, you could potentially find someone that will be able to give you more for the money. Due diligence is the key to trust deed investing.

Foreclosure is a normal thing when it comes to trust deed investing.

iStock_000001509328MediumThere will be ventures that will fail. Nothing in real estate lasts forever, and foreclosure could happen if your client is not careful. So what happens after your client defaults and foreclosure is in the pipeline? If you are in California usually the foreclosure process would last about four months after the client were to default.

As far as the selling process goes, that should take around 60 days; it may take a little longer if the property was improperly valued. Another thing that you have to take into consideration is bankruptcy. If your lender decides to file for bankruptcy that could add more time to the foreclosure process.

Character is everything when it comes to trust deed investing

One of the best tools a lender or investor can use is intuition. Sure you could look at your borrower’s credit file. You could extensively go through their business plan. But at the end of all your research, your gut could be your saving grace. If you do not feel as though the investment is not for you give it you someone else that is willing to take the risk.

Level-4-Funding-Dennis-Dahlberg-Mort[1]Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
http://www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

 You TubeFace Book Active Rain Linked In

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.

Friday, November 18, 2016

What does the borrower need to bring to the table when trust deed investing?

Arizona Home Loan Mortgage BrokerWhen it comes to trust deed investing preparation is the key to a successful venture. Lenders have their quality standards that they should adhere to, but what of the borrower? What must they do to make sure that the whole process goes as smoothly as possible? This brief piece will provide the newcomer with the tools they need for a successful investment.

When you were studying for your driver’s license you had to make sure that you had everything in order before you took the written and driving tests. If not you would have to go back and redo everything. The same goes for trust deed investing you want to make sure that before you attempt to borrow you have all your prerequisites taken care of.

Contingency is the most important word to keep in regard to commercial real estate. The first thing that you should focus on is a backup plan in any event something were to happen to you. For example, if you were to get hurt during the life of the investment, you would need to make the necessary arrangements so you do not default on the monthly payments. Each day investors are faced with unexpected setbacks. Since trust deed investing does affect your credit planning before hand will help you before your investment does too much damage.

In regard to credit, as stated in previous articles, you do not have to have the best credit in the world to take on a trust deed investment. There are other options you have to get money, such as a hard money lender, but you want to make sure that your credit is still acceptable. It does not need to be around 780, but having a little padding would not hurt.

Trust deed investing requires you to do a bit more work.

Commercial real estate, in general, requires you to do as much background work as possible so there are no mishaps that could hinder your investment. The biggest stumbling block that most investors face is the preliminary research that needs to take place. In regard to research, many fall short calculating the value of the property.

This, in turn, could affect your margin of safety if, in any event, you were to fall behind and default on your loan. Say you valued a certain property at $300,000 and you were able to borrow a loan $200,000, your margin of safety would be $100,000. Now fast forward a few weeks after the ink has dried, and you find out that the property was only worth about $250,000. Now if you were to run into any issues your margin of safety is dropped down to $50,000.

Is trust deed investing the right choice for you in your career?

One of the best things that you could do to prepare for a new investment is to know when you are not ready. It may be tough at first, but quitting before you figure out it is too late. It is much better to start from ground zero than to dig yourself out of a deep hole.

Level-4-Funding-Dennis-Dahlberg-Mort[1]Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
http://www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

 You TubeFace Book Active Rain Linked In

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.

Thursday, November 17, 2016

Trust deed investing gatekeepers: Who can lend you money for your investment.

Trust deed investing takes money just like all the other real estate ventures that you may undertake. You have a plethora of options that you could take when you are trying to fund your first trust deed investment. In this brief you will learn about all the institutions that are willing to give you a loan.

So you are looking to dive into the deep end of the trust deed investing pool, but you are having trouble finding lenders. You have found the perfect location, the perfect building and the deed of trust are available, as well. Now all you need is the loan. The process of getting a loan is complicated and nerve-racking even if you are not in the commercial real estate field. It could take weeks or months for certain loans to be approved; even then you are not guaranteed a loan at the end.

What happens if the place you are looking at has more than one party interested in it? You have to be able to quickly get those funds before someone else undercuts you. Luckily for you, if you are familiar with the commercial real estate business many of the lenders that you already know are able to provide you with the loans that you are seeking.

For example, let’s say you have a low credit score, and your local bank is not willing to lend you the money you need. In this case, a hard money lender would most likely yield the best outcome. If you decide to apply through a hard money lender, you can expect basically the same process with a regular investment. As usual, they will charge you higher rates than the bank normally would, but you would most likely receive the loan quicker. There is also an origination fee that is paid to the lender when you receive the loan. It is represented by posts that correspond to 1% of the loan amount.

Angel OakBridge loans can be used when trust deed investing as well.

Without a doubt, yes, you are able to use bridge loans for trust deed investing. In fact, more often than not hard money loans and bridge loans can be mistaken for the same thing. There are subtle differences, however, with a bridge loan you would typically want to have more reliable credit. Most of the time banks would lend a borrower a bridge loan.

There is one big advantage that bridge loans have over hard money loans; the property does not need to be in great condition. That being said, you do not want to purchase something that will not help with your monthly payments.

Make sure you do your research when trust deed investing.

So you know where you could go to receive help, but now how do you go about getting it. One of the best ways is by relying on your connections. Use people that have experience with trust deed investing. Look at their reviews online; email some people if you have to, as well. Just make sure you feel comfortable with your decision in the end.

Level-4-Funding-Dennis-Dahlberg-Mort[1]Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
http://www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

 You TubeFace Book Active Rain Linked In

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.

Wednesday, November 16, 2016

Trust deed investing can be very risky, but what could possibly go wrong?

cta-box2Trust deed investing has its benefits, but often many people have to face the downsides, as well. The rates could go up unexpectedly or there could be a mistake made on the documents that the borrower and lender have drawn up may have made an error. This can cause a mountain of issues that will need to be taken care of.

Variables are things that you should always think about when you are investing in commercial real estate. There is a myriad of things that could go wrong when you are dealing with commercial real estate. Things could go extremely well for a period of time, but what happens when your business plan fails? What happens when the dice roll a different way? The real question is what should you look out for when you are investing.

Trust deed investing is not fool proof. As an entrepreneur, you should make backup plans for your backup plans. Details, especially in trust deed investing, are the single most important things to any deal. One of the most common mishaps that cause trust deeds to fail is a missed number, name or small detail. For example, say you find a property that you estimated a certain value.

Now say the property value is not as high as you thought. The margin of safety could potentially be insufficient to cover the entirety of the expenses that may incur. We all know when it comes to real estate changes in property can happen at any moment. Now add in a random godly act, such as a tropical storm or flood, you may not be able to cover the needed repairs. This could end up leaving you in the hole of debt.

Do I still have to worry property value when it comes to trust deed investing?

Sadly yes, as stated before there could be something that could happen out of nowhere. Once this happens the borrower has to take the first loss on the investment. They are still required to pay back all the loan amount. If the borrower is unable to pay the loan back then foreclosure usually follows soon after. It is in the investor’s best interest to sell the property at a price that is less than the value of the loan, as well.

This will not always ensure that you will get your money back in full, but there is a strong chance that you will be able to get some form of payment for the investment. Make sure that the property value is sufficient to support the margin of safety.

Can bankruptcy affect trust deed investing?

Once again yes, bankruptcy can affect your trust deed investment. This will cause a few hiccups in the when you are trying to move ahead with foreclosing. In general, a foreclosure usually takes a couple of months to settle. When bankruptcy is involved an additional number of months to an already long process. Bankruptcy judges are also allowed to change certain things documents related to the trust deed. The interest, for example, can be changed to alleviate some of the circumstances the borrower is facing.

Level-4-Funding-Dennis-Dahlberg-Mort[1]Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel:  (623) 582-4444
Texas Tel:      (512) 516-1177
Dennis@level4funding.com
http://www.Level4Funding.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701

 You TubeFace Book Active Rain Linked In

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.

Monday, December 8, 2014

Understanding - What Is Trust Deed Investing?

What Is Trust Deed Investing?


Investing in deeds of trust is a little known but very effective investment strategy for real estate investors. With high rates of return and real collateral, investing in trust deeds is an easy, and
generally low risk way to earn money.

In the United States, there are two types of real estate transactions, true mortgages and deeds of trust sale. In a true mortgage sale, there are two parties involved, the bank or lender, and the borrower. The borrower is given the deed to the property he/she is purchasing and the lender has very little security or collateral. A second form of real estate investing is called trust deed investing. This type of investing differs from a true mortgage in that there are always three parties involved, the bank or lender, the borrower and a third party who is investing his/her personal capital in the deed of trust. For the savvy investor, investing in deeds of trust can be an opportunity to earn high interest rates with low investment risk.

Very few investors know about this investment opportunity related to investing in deeds of trust in real estate transactions. During trust deed investing, an investor acts as a third party during a home purchase transaction. The bank loans the money, the borrower purchases the property and repays the loan, and the investor, or trustee holds the deed to the property. The trustee holds the legal title to the property and the borrower holds the equitable title to the property. The trustee holds the deed as security to ensure the repayment of the debt to the lending bank and the bank pays the trustee interest for this service.

Trust deed investing boasts high rates of returns on investment and can fit almost any budget. An investor typically earns anywhere between 7% and 12% on trust deed investments. This is significantly more than any savings account and most stock options. In addition, investing in trust deeds is generally considered to be a fairly safe investment strategy because the investment is backed by actual real estate collateral. An investor can literally drive by and see his/her investment. The trustee can also help insure his/her investment in trust deeds by having property appraisals and working with a licensed broker for the transaction. Another way to secure the investment is to invest only in the first position in the deed of trust. The first position ensures that this trustee will be paid first in the event of a default.

Benefits of Trust Deed Investing For the Lender


As discussed above, in a true mortgage, the borrower holds the deed to the property. If the borrower defaults, this can become messy for the lender. Since the borrower holds the deed, the lender actually has to take judicial action against the borrower the borrower defaults. The lender sues the borrower for the deed to the property. As with any legal action, this takes time and costs money. There is also always the risk that the court will side with the borrower, leaving the lender with no recourse and a very large investment lost. Once the lender has the deed and legally owns the property, the lender sells it, usually for a loss, causing the lender to spend money twice. Once on the law suit, and once in the form of unloading a foreclosure property.

In a trust deed investment, the trustee holds the deed to the property. The trustee has invested a certain amount of money to hold the deed and the lender pays the trustee interest for this service. In the case of trust deed investing, if the borrower defaults on their loan, the trustee sells the property on behalf of the lender. The lender does not have to sue the borrower or wait for a judge to make decisions about who has the right to sell the property. There is also no risk that a judge could side with the borrower. The sale is generally quicker and results in a smaller net loss for the lender. After the sale, the trustee retains his/her initial investment as long as the property was not sold for a loss. The lender also gets their investment back.

Investing in deeds of trust is usually a win/win situation for the lender and trustee. The trustee earns interest while the lender protects their collateral.

If you are interested in learning more about trust deed investing, contact a local broker to find out different options in your state. A broker can help you navigate the trust deed world to find the right investment for your budget. A broker will also have a deeper understanding of specific laws and regulations in your state. Once you a ready to take the plunge, investing in trust deeds can be a very secure investment strategy to help grow your personal wealth.

Level 4 Funding LLC
23335 N 18th Drive Suite 120
Phoenix AZ 85027
623-582-4444


Wednesday, November 26, 2014

How can I begin Investing in Trust deeds?

Many experts believe that investing in trust deeds is one of the best investments out there. You will need to have a thorough understanding of how it all works, but if you learn all you can you can certainly turn a profit with the right property and good research. If you take the time to learn the correct jargon and a good knowledge of the how it works you can make the right decisions regarding our investment and make some money.

To begin with, you will need to know what a deed of trust is. A trust deed is a real estate transaction that that is used instead of a mortgage in some states. Investing in trust deeds is a transaction that is made up of three different parties. There is a lender, a borrower, ad a trustee. The lender will lend the money to the borrower and the borrower will give the lender a promissory note, or a signed document that contains all the crucial information that is necessary for the transaction. This will include how much they are borrowing, what the payment plan will look like, the amount of interest that will be charged, etc. They also need to transfer property deeds to a third party trustee. In case of a non-payment and the loan defaults, the trustee will then take over the property.

In most cases the trustee will be a title company. Often, there will be a transfer of the legal title to the trustee. Sometimes the title company will only have lien on the property. Whatever one that will be used is dependent on the state that you live in. There will be a power of sale clause in the signed documents. This means that the trustee and sell the property without having to get a court order. By having the deed of trust, those who are investing in trust deeds can insure that they will get a return on their investment.

Who looks for loaning from people interested in investing in trust deeds?


Most experts think that investing in trust deeds is a great choice, and with the current market now it an especially good time to do so. Because the market is struggling, it is hard for most people to get loans, even if they are reasonably good candidates. The banks just are not giving out many loans. Because of the limited amount of loans available from the banks, there are more people looking for lenders from someone else to loan to them. So, you are able to loan to people who are willing to pay a little higher interest rates. They are also not as much a risk because of the limited amounts of loans.

Many of the people looking for loans from those investing in trust deeds instead of banks are “flippers.” These are people that purchase properties, usually at foreclosure prices, and then decide to fix them up with the intent to resell them as quickly as possible. These flippers need to buy low and sell high, and they need to do all of this as fast as possible. Most borrowers will hope to pay back the loan within a very short time, from six months to a few years. The faster they sell the more they make.

It is because the banks do not want to lend to these business people that they are looking for other options. Most banks do not want to take the risk of lending money to buy a home that is already foreclosed, because they do not have the ability to protect themselves. Those who are investing in trust deeds will have the deed to the property so they will have to take over the property if there is a default on the loan. It is important that the lender is willing to take responsibility of the house if that happens.

Another advantage in going to trust deed investors is the speed they get their money. Moving quick is key in making a profit, and most loans can be processed in a matter of days rather than 45-90 days that it will take a bank.

What do I need to do to begin investing in deeds of trust?

Find out as much as you can about the people and properties you may be working with. In trust deed investing you will usually go through a trustee. They will have different available properties with details on each one. Read all the necessary forms, then sign and return them. If you need advice, be sure to ask for help in understanding what you are getting into. Request a due diligence package containing an appraisal so that you can inspect your trust deed investment. Then you will need to sign the right forms and send wire funds to escrow. The borrower will then begin to pay the amount that was put into the promissory notes and you will being to make a return on your investment.

Setabay Loans
23335 N 18th Drive Site 120
Phoenix AZ 85027

www.SetabayLoan.comwww.setabayloan.com

Monday, November 24, 2014

What do I need to know about Investing in Trust deeds?

I have heard that investing in trust deeds can be a lucrative field, but I am hesitant to invest in anything without knowing more about it. How can I make money by investing in trust deeds?

Investing in trust deeds is a good option for a lot of people. If you have a sound knowledge of the
field, investing in trust deeds can certainly make you richer by making a good return on your investment. But if you go into without research and a firm grasp of the concepts and terms involved with deeds of trust you may be at risk for some losses. There are some things you will need to know before you begin.

First, you should know what exactly a deed of trust is. A trust deed is basically a real estate transaction that many states use instead of a mortgage. These transactions are usually made up of three different parties: a lender, a borrower, and a trustee. The lender lends to the borrower and the borrower gives the lender a promissory note. A promissory note is a signed document that states information crucial for the transaction like how much they are borrowing, a payment plan and interest rates, etc. The borrower will also transfer property deeds to a trustworthy trustee. If the loan defaults, the trustee will take control of the property.

Usually, the trustee will be a title company. Sometimes there is an actual transfer of the legal title to the trustee, but in some cases they only have a lien on the property. This usually depends on what state you live in. In most cases, there will be a power of sale clause that allows the trustee to sell the property without having to get a court order. By doing this, those who are investing in trust deeds can insure their investment.

What are the risks that occur when investing in trust deeds?


While investing in trust deeds can be very profitable, there are some certain risks that you should also be aware of. But there are also some ways that you can mitigate the risks so that you can plan for the best possible outcome. Planning for what can go wrong is not pessimistic, it is a smart move. You can then plan to succeed!

Investing in trust deeds is not a sure thing kind of game. Your investment will be impacted by the Real estate values may go up and down. Sometimes this will help your investment, but of course the opposite can happen as well. Not only the present market, but the future one can affect your investment as well. These can be difficult to predict, even for the most knowledgeable.
fluctuating marker conditions.

You will also find that many people are hesitant to purchase while still feeling the heat of the recession. Some things are picking up but the problems with the current economy are going to impact your profit margin. However, most trust deed investors can certainly benefit from this current market trend! It is because of the poor economy and the resulting foreclosures along with the unwillingness of the banks to loan that has produced the market of investing in trust deeds!

Bankruptcy can also be a concern. If your borrower chooses to file for bankruptcy your investment will be seriously compromised. It is very important to be sure that all the paperwork is in order. As most other who are investing in trust deeds will do, make sure you have the title to the property they have borrowed on so that if there is a problem with any payments, your investment will still be protected. You will have to sell or rent the property yourself, so before you even start investing in trust deeds, make sure that it is a property you feel comfortable dealing with on your own.

Besides business disasters you may also find your investment being pounded by natural disasters. Natural disasters and environmental concerns are hard to stop, and even harder to predict. Avoid known locations for natural disaster like hurricane zones, earthquake areas, tornado ridden counties, and over-development on hills that may lead to a landslide. Also invest in some home insurance to take the edge off should something happen.

Is it worth investing in trust deeds if there are so many risks? 

Can I make this work when so many things can go wrong?


Investing in trust deeds can be very lucrative. As stated above, there are certainly things you can do to prevent most losses on your investment. But every investment comes with risk. As long as you research, mitigate any potential risk that you possibly can and have the help of good people you can make a solid return on your investment.

Setabay Loans
Dennis Dahlberg
23335 N 18th Drive Site 120
Phoenix AZ 85027