Serving California's Private Money Lending Needs Since 1975

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Val-Chris Investments - Trust Deed Investing


Conventional mortgage rates are generally determined by a number of factors such as the federal reserve’s rate policy and the secondary market. In the current environment of rising interest rates, while interest rates are generally low, conventional lender’s rates change daily in small amounts. The final rate is dependent on when the rate is “locked in” by the lender putting the loan together.

No investment is guaranteed regardless of the vehicle you choose to put your money into. When it comes to the stock market, your money is vulnerable to market changes and “word of mouth”. Trust deeds are secured by real property and there are policies in place to protect the lender against certain losses, making them one of the safer investment choices for someone looking to make a higher return on their money.

On September 9th, 2015, the California Legislature passed bill AB 139 and Gov. Jerry Brown has signed this new legislation which has created a new form of deed for the transfer of real property in California effective 1 January 2016. The new deed is call a “Revocable Transfer on Death” deed (which we will call a revocable TOD deed), and this deed allows an owner of real property to deed it to a named beneficiary without the risk of a lengthy and costly probate proceeding or the requirement for formal estate planning documents.

A proposed Constitutional Amendment being considered by the California Senate this 2016 session will potentially affect thousands of taxpayers in our state, either directly or indirectly.

Private money lenders or hard money lenders exist to serve typically underserved markets in the real estate industry. Those markets range from potential homebuyers who are having difficulty getting residential loans from banks to investors and commercial entities seeking bridge loans. However, given the number of players in private money loans today, underserved may not be the right word.

In the world of trust deed investing, many people wonder what the difference is between using an appraisal as opposed to a broker price opinion (a “BPO”) to secure a hard money loan for either a residential or commercial property. The truth is that they serve the same purpose, as private money loans are issued by private investors, and the loan’s conditions are greatly affected by the value of the asset being used to secure it. In fact, a borrower’s equity in the property is a key consideration when underwriting a loan.  While both the BPO and the appraisal will give the private money lender a value on the property, are the costs, report detail, and skill level of the valuation analyst the same?

Investors have become accustomed to the Federal Reserve’s routine. “Coming Soon! A Rise In Interest Rates…But Not Too Soon!”

Whenever the Fed meets, analysts parse the words of Fed Chair Janet Yellen and speculate on when benchmark interest rates will rise from the 0.25% range in effect since late 2008. The stock market goes into a minor convulsion and things settle back to normal—whatever normal means in today’s economy.

You may not think there is much difference between what is real and what is personal where it comes to property. But there is actually a significant difference. Even so, why would you need to know the difference? When you're investing in real estate, the difference between real and personal property is very important, because it allows for a decision to be made about which rules should be applied to a specific item and what courses of action are available when property rights have been violated.

Anyone with the goal of becoming wealthy has, at one time or another, likely considered investing in real estate. Indeed, this is one of the best ways to achieve financial security. But it is a very competitive industry, and so the best way to ensure the highest chance of succeeding in the real estate investment game is to employ the proper strategies.

When you are in the market for a new home, you need to be considering many factors that will lead up to the closing.  Keep in mind that your mortgage lender is also doing the same. One of the most important things that your mortgage lender will be looking at, is the LTV (loan to value) ratio. Simply stated, the loan-to-value ratio is a lending risk assessment ratio that financial institutions and others lenders examine before approving a mortgage. You determine the LTV by dividing the price of your new home by the total loan amount. The resulting percentage is the value of your new home. Here are four reasons why the LTV is very crucial when making this deal.

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