Trust deeds are the preferred way to invest for many. Not only do they offer big returns, but they help increase the security of investors due to the fact that they are based on something tangible: real estate. There are many opportunities for both big and small investors where it comes to trust deed investing.
Freedom of Capital
One of the best benefits of the trust deed is that any cash, whether business or personal, can be used to invest. As well, any business profits can be used for future trust deed investments. However, it’s important to take care when using any capital for any investment. Viewing all deed of trust investments as risk capital that could potentially be lost is a good way to keep spending in check.
Another benefit of trust deed investing is that you automatically have the right to foreclose on any property where the borrower has defaulted on the loan. The ability to leverage this ownership creates more benefits, such as the owner being able to recoup their investment in several ways: by renovating and selling for a higher price, or renting or leasing the property for passive long-term income.
A Door Opener
Trust deed investing can also open the door to other investment opportunities. These opportunities can be lucrative, leading to investments in development properties, commercial buildings and multi-unit rentals, which can all exponentially increase an investor’s income.
Various Investment Levels Available
Trust deed investing is a tempting alternative to many investors due to the wide range of investment options. Trust deed investing can be entered into with as little as $5,000 or cost as much as tens of thousands of dollars. This allows virtually anyone with the desire to increase their wealth with real estate investing to take steps to doing so.
Trust deed investing offers a return on investment that comes in at higher than average. The typical return of 9 to 14 percent is not uncommon for the trust deed investor. Another benefit is that trust deed investors can control both the structure of the loan and the interest rate.
Hard money loans are typically used for trust deed investments. As such, private lending companies offer borrowers a one-stop shopping experience. A private lender brings the borrower and lender together, but they also do much evaluation work of borrowers and lenders alike. Lenders also can take on various tasks associated with hard money lending, which makes it simple for the borrower to invest in a deal that is reliable, safe and will yield a high return.
Trust deed investing is, by its nature, quite secure. This is because trust deed investing has a guaranteed yield. As well, the management of such loans and investments is backed by experience. As well, the risk is far less than the return one can receive from this type of investment.