If you’re in the research phase of trust deed investing, you are probably looking online, talking to mortgage brokers and to friends who have experience funding private money loans. There is a lot of information available about the Note, Deed of Trust, and Security Instrument. However, there’s not much information about the real-life problems that arise with trust deed investments.
Current updates on the real estate market, private money, hard money, and trust deed investing.
Trust Deed Investing
First Capital Trust Deeds is a California-based mortgage broker specializing in mortgages for real estate investors, including Private Money, NonQM, Conventional, and Bank Portfolio programs. FCTD holds broker and/or lender licenses in five states:
Like most of First Capital Trust Deed’s current trust deed investors, you have funded private money loans in the past and are familiar with how the process works. Maybe you’ve worked with other private money mortgage brokers over the years and working with FCTD is new for you.
Usually when a lender does a bridge loan, the borrower will improve the property and the advance rate will decrease, not increase. This blog post discusses the how trust deed investors need to beware of predevelopment margin erosion on the loans they fund.
At First Capital Trust Deeds, we run background checks to underwrite private money and hard money loans, especially when working with a new borrower for the first time. Background checks have helped us discover some red flags or helped fill in the information gaps when something in the conversation with a potential borrower didn’t seem right and we couldn’t figure it out but knew something was off.
Deciding on how to invest your money is never an easy task. There are lots of options, each with their own pros and cons. You may be most concerned with how to get the best return on your investment. Trust deed investing is a unique approach that can allow you to diversify your portfolio away from the often-erratic stock market.
If you’re looking for ways to diversify your investment portfolio, consider funding trust deeds.
While owning property can certainly be lucrative, it comes with a lot of potential downfalls too. What if your apartment complex needs a new roof? Will that office building require more management than you have time for?
In the early and mid-2000s, mortgage lenders were handing out loans without the notion that they would ever be successfully paid in full. This, along with other factors, created the mortgage crisis that followed. In response to the crisis, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. This act allowed the Consumer Financial Protection Bureau (CFPB) to implement new rules to protect consumers who are borrowing money to purchase a home. One of those rules was the Ability to Repay requirement for closed-end residential mortgage loans.
Investing can be tricky, no matter how financially savvy you are. With the current state of flux in the real estate market, it is no wonder people have questions about whether it’s smart to invest in trust deeds. Here’s the low down.