About Investing

How can I invest into Trust Deeds?

The two primary ways you can invest in Trust Deeds is through direct investing and pooled investing.

How does direct investing work?

When you invest directly into a Trust Deed you either lend money or buy an existing Trust Deed as a direct individual or through one of your entities or retirement accounts.  Your name is on the recorded security instrument and you have the responsibility to manage the payments, communicate directly with the payor and foreclose on the property in the event of default.  The main risk of direct investing is that you are liable to foreclose, fix up and resell the property in the event of default.  If you have a poor payor, it can also involve significant time and energy to make sure the payments keep coming in.  The main advantage is that you can consistently earn 8 – 12% annual returns on direct Trust Deed investments.  We recommend that only sophisticated investors with a complete understanding of the risks and responsibilities consider direct investing.

How does pooled investing work?

The basic principle behind pooled investing is investors combining their capital to buy multiple 1st Trust Deeds usually through an equity or debt investment into a partnership, LLC or private offering.  The entire portfolio of assets is usually the security for your investment.  The main advantage of pooled investing is diversification.  Your investment is spread out across a portfolio of Trust Deeds which lowers your risk of loss in the event  of default by one of the payors.  Pooled investing has its own risks however, the biggest being company risk since you are usually relying on an individual or firm to both underwrite and service the portfolio.  Your main due diligence in that case is finding a proven investment firm with a proven track record that you can trust.  The main advantage of pooled investing is that you can often earn 5 – 8% passive returns that are non-correlated to traditional fixed income investments.

Where do I find Trust Deeds?

The best way is to work with an experienced, licensed trust deed brokerage or pooled investment firm.  When you work with experts, you will gain access to higher quality investments, the transactions will be easier and you will greatly lower your risk of violating state/federal securities, usury and mortgage licensing laws, which can happen when investing on your own.  Click here to contact us and to learn more about where to find quality 1st Trust Deeds. 

Where can I go to learn more about investing in Trust Deeds?

Click here to go to our Tools & Resources link.  If you have questions after looking through the resources, please contact us.  We are happy to share our experience with you so please click here to send us an email.