Why Borrowers Take Advantage and Benefits of Trust Deed Investing?

The Advantage and Benefits of Trust Deed Investing?

Since interest rates for trust deed investing can be very expensive (some even in the double digits!) you have to be wondering how anyone can afford to borrow at this rate. Usually, the borrowers for these types of loans are not your traditional borrowers. They are savvy in the real estate market and have a solid plan and understanding of their goals. Most properties purchased with these funds are fixer-uppers and the borrower plans to receive a high return on their investment when all is said and done. They are willing to pay high interest rates to avoid the hassle of the bank, get their money as quickly as possible, and pay for a shorter term on the loan. Likely, they already have a ballpark figure of what the property will go for in the end, so the interest rates don’t seem quite as daunting to them. They can enhance their return on investment by eliminating the bank and getting things done quickly. In many ways, the borrower can benefit from trust deed investing as much as the lender/investor, if not more.

Dennis Dahlberg
Broker/RI/CEO/MLO
Tel:  (623) 582-4444 | Fax: (888) 279-6917
www.SetabayLoan.com
NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027

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

Dennis Dahlberg

23335 N 18th Drive Site 120

Phoenix AZ 85027

www.SetabayLoan.comwww.setabayloan.com

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

www.SetabayLoan.com

How can I safely begin Investing in Trust Deeds?

Because you are investing in trust deeds privately, and therefor do not have all the resources that a bank does, you will surely have to take some precautions. You will secure your

investment by a deed of trust that is recorded against the property title of the borrower’s property. Because you are a private institution and you are unable to be insured by the FDIC. That is more risk to you. However, if the borrower could go through the bank, you would be unable to invest in this kind of opportunity. That is why you have the title. It is in some ways the insurance on your investment.

Along with the deed of trust, you may consider actual insurance. Home insurance will protect your investment from natural disasters. These are hard to predict, but such a step will save you a lot of money in the long run, if such a disaster took place.

What else should I be doing as I prepare to begin Investing in trust deeds? How can I get ready and give myself the best chance of being successful?

You will find that knowing a lot of the real estate jargon will be very helpful as you begin investing in trust deeds. Along with that, an understanding of how the market works, what the projections are like, and other investment terms will help considerably. Learn to understand market values, what the equity in the property is, and what the security of the loan is.

You will also want to be sure of the borrower. Take time to research what their financial standing and credit is, along with their character and integrity. You will be involved with them for quite some time, so make sure that the business relationship will work. You will want to do the same with the mortgage loan broker. These people are also what you are investing in and if you feel uncomfortable, it’s better to stop before you even begin. Many investing in trust deeds end up going to court because of problems with the relationship. And have a backup plan. What will you do if the borrower falls through on payments? How will you handle late payments? Most of that should be decided in the beginning and on the promissory note, but it is good to know in advance.

Like any investment, investing in trust deeds does have some risk, but you may also find it to be very rewarding. You may find that the risk is very much worth it as you begin to make a profit. Just be wise, do your research, and find honorable people to do business with and this may be the most rewarding investment you have ever made.

Setabay Loans

Dennis Dahlberg

23335 N 18th Drive Site 120

Phoenix AZ 85027

www.SetabayLoan.com

Investing In Deeds of Trust Important Information You Need to Know

What you need to know before Investing in Trust Deeds

Before you begin Investing in Trust Deeds, there are some things that you will want to know. Deeds of trust are a different kind of investment than stocks or bonds, so you will want to familiarize yourself with the different terms and practices that make up trust deed investing. Below are some important things for you to know before you begin.

In most cases, Investing in Trust deeds involves purchasing existing funded loans or promissory notes. Then you become the person the borrower pays the remaining amount to, plus the interest. Sometimes it is not an existing loan, but a new one that goes between you and the borrower. In either case, you will be given the deed of trust against real property in order to secure your investment. If the borrower is unable to make the payments, then the property becomes yours.

But what exactly is a promissory note? 

This is crucial information, as it is a big part in Investing in Deeds of Trust. A promissory note is really a contract, or a written promise, that states that they will pay a certain amount of money by a certain time. It may state the number of installments, as well as the payment of interest. The person receiving the loan will legally become obligated to pay the debt when they sign the note. Along with the amount of the loan, the interest rate, number of payment installments, and when it must be paid by, it also states any penalties for late payments.

You obtain a promissory note by either purchasing the note or lending to a borrower. If you are doing this privately, without the use of a real estate broker, you will most likely be subject to an “interest rate ceiling” that is determined by whatever state you are doing business in. If you are charging over the amount of the ceiling, then you would be guilty of “usury.” It is often helpful to use a mortgage loan broker to assist you in following the laws while still receiving a fair profit on your investment.

Setabay Loans

Dennis Dahlberg

23335 N 18th Drive Site 120

Phoenix AZ 85027

623-582-4444

www.SetabayLoan.com

Pitfalls of Trust Deed Investing - Can you actually make money

How Can I Make Money by Investing in Deeds of Trust?

We all want to make the right kind of choices with our money. Sometimes it is hard to know what can be the best option for your money and how you can best make a profit. With the struggling economy, it is more important than ever to thoroughly research your options.

Setabay Loan Trust Deed Investing

Many experts think that investing in deeds of trust is a great way to make the invested money back, along with a good amount of return. You will want to understand how most people are making money by investing in deeds of trust.

The process of making money by investing in deeds of trust you are becoming the bank.

Trust Deed Mortgage Broker

You are just the bank for someone else. The bank makes money by using the money its customers puts in savings and then lends it out in loans to other customers. They have to pay a small amount of interest to the customers but they get a larger amount of interest from the loans. As a trust deed investor you will be doing the same thing but without having to pay out interest. You will just make money! Like banks however, you will secure your loan with a promissory note secured by a recorded Deed of Trust. When they do this, they have a limited risk because they will get the property on the note is they are not paid. You will also have the same limited risk. This is exactly what you will be doing with a little more risk, but a chance of a higher profit. Instead of using other people’s money you will be loaning out your own. All the money comes to you, instead of the bank, and minus the small amount of interest paid on the deposited money.

What do I need to get started investing in deeds of trust?

There are some restrictions in some states on how investing in deeds of trust can work for an individual. For example, in California, no one trust deed can be worth more than 10% of your net worth. So you cannot have more than 10% of your total net worth invested in trust deeds.

How much money you will make per year depends on the length of the individual investment. Some investments last for only three months and some will last for several years, depending on what you choose to pursue and someone interested in investing in deeds of trust.

What are some of the risks? What do I need to be aware of before I begin investing in deeds of trust?

There are some risks, but if you are aware of them you can make a plan to lower some of the risks. Here are a few of the biggest risks that come with investing in deeds of trust.

1. Investing in deeds of trust can be an unstable investment. It will be impacted by the fluctuating market conditions. Real estate values will most likely go up and down. There will be times when it will help you, but there will be other times when it may hurt your profit margin. And you will need to realize that not only the present market, but the future one may affect your investment as well. These can be difficult to predict, even for the most knowledgeable.
2. You will also find that many people are hesitant to purchase. 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 that make the amount of money you can make possible. Because the banks are unwilling to loan, you can charge higher interest rates.
3. Bankruptcy is also a big concern. If your borrower files for bankruptcy your investment will be a big problem. It is very important to be sure that all the paperwork is in order. Make sure you have the title to the property they have borrowed on so that if there is any kind of problem with payments, your investment will still be protected. This is a good choice for all interested in investing in deeds of trust.
4. Natural disasters and environmental concerns can be a danger to your property investment. Avoid known locations for natural disasters like hurricane zones, earthquake areas, tornado ridden counties, and overdevelopment on hills that may lead to a landslide. To help mitigate any problems with Mother Nature, invest in some home insurance to take the edge off should something happen.

Investing in deeds of trust can be a good opportunity, and as long as you make a plan to avoid these risks, you can make a lot of money.

Mortgage Broker

Setabay Loans
Dennis Dahlberg
23335 N 18th Drive Site 120
Phoenix AZ 85027
www.SetabayLoan.com

How to Make Money by Investing in Deeds of Trust

How to Make Money by Investing in Deeds of Trust Arizona

There are a lot of options out there when it comes to investing your money. It can be hard to know what a good option is for you, and what can give you the best return possible for your money. Especially with the recent struggles of the economy, most people are hesitant to try to invest money without a thorough understanding of how they can get it all back, with a sizable return. Here is an outline of how most people investing in deeds of trust are making money right now.

Let me break it down to the very basics for you. When you are investing in deeds of trust you are essentially becoming the lender. You will become the bank for someone else (the borrower). A bank will take your money through deposits and give you a certain percentage of interest when you keep it in the account (usually a savings account). Then they lend it out to others at a much higher rate of interest, thereby giving them a sizable profit margin. They will also secure these loans by having promissory note that is secured by a recorded Deed of Trust. By doing this, they are not risking their money in a situation like the stock market because they will gain the property recorded in the deed of trust if there is a default on the loan.

This is exactly what you will be doing. But instead of using other peoples deposited money you will be putting up your own. But you will also have a higher rate of interest you can make back because you will not be paying your customers their rightful share of interest, and you can generally charge a higher rate anyway.

Do people actually need to borrow from those looking to begin investing in deeds of trust?

While investing in deeds of trust is a good choice, now is an especially attractive time to do so. The current market is making it harder for most people to get loans. Because of the restrictions by lending banks, more people are looking for lenders. And a lot of these people are not as high risk as you would suspect, just restricted by the low amount of loans that banks are lending. Often, the interest rates are even better than what the banks are offering.

Most of the people who are borrowing from trust deed investors are experienced businesses

Setabay Loan Trust Deed Investing

or people that purchase properties that are selling at a very low price (often foreclosures) with the intent to fix them up and then resell them for a profit or to rent to people. Their success lies in buying them at a very low discount, fixing them up quickly and then selling them fast by implementing a smart marketing program. This usually happens in the period of 6 to 8 months, or a few years. The quicker they sell, the more money they make. Because most banks are reluctant to lend to those that will be purchasing a non-occupied dwelling, these people look to those that are interested in investing in deeds of trust to help them out. They also have the advantage of quickly receiving their money and finishing paperwork, unlike some banks that may take 45-90 days.

What are the steps I need to take to begin investing in deeds of trust? What can I do now to start the path to making money on this investment?

To begin with, you should learn all that you can about investing in deeds of trust. Familiarize yourself with the jargon, the people, and the properties. Find out as much as you can about the people and properties you may be working with. Many times you will go through a trustee that will have available properties along with details on each one. Decide which ones you may be interested in investing with. Read all the necessary forms, then sign and return them. These will be the investor forms and agreement. You should also request a due diligence package that will usually contain a certified appraisal so that you can inspect your trust deed investment. Then you will take the plunge by signing the right forms and sending wire funds to escrow. You will then receive the loan package and the interest will begin to accrue. Congratulations, you are now making money! 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.

There is a lot that goes into investing in deeds of trust, but you may find that this kind of investment is that best place for your money in this market.

Broker Level 4 Funding LLC

Setabay Loans
Dennis Dahlberg
23335 N 18th Drive Site 120
Phoenix AZ 85027
www.Setabayloan.com