A Trust Deed investment is a loan, with real estate as collateral to protect you, the private lender. A borrower applies for a real estate loan with a loan originator, such as a mortgage lender or mortgage broker. The borrower promises to repay the loan amount plus interest, by making payments according to the terms of a note. The lender secures the promise to pay by using a trust deed, with the real estate as collateral. If the borrower does not make the loan payments as agreed, the lender may foreclose on the real estate to recover all overdue payments, late fees and the balance due on the loan.
Why Trust Deed Investing?
The motivation to start Agoura Hills Financial was to have a vehicle to invest conservatively in a real estate portfolio while minimizing risk and maximizing returns. Trust deed investing offers the opportunity to diversify into real estate investments without the hassles of buying and flipping homes, managing tenants and making repairs to units. Over the past ten years the stock market and bond investment returns have been inconsistent at best, while Trust deed investments have consistently paid above average returns. A 10% return on a trust deed doubles itself every 7 years.
Because our focus is consistent returns over time we are very selective as to the properties and borrowers we are lending to. We mitigate risk with low loan to values on income producing properties. It is our opinion that a diversified portfolio is a wise idea and should include investments that pay consistently over time.
Through fractionalized TD investments we offer the ability to diversify within the various real estate types. A $200,000 investment can be broken into 4 different property types which diversifies the portfolio and reduces exposure: Multi-Family, Industrial, Office and Retail. Self directed IRA’s are another way to take advantage of high returns while preserving the benefits of an IRA and planning for retirement.
Trust Deeds are simple to understand. We are lending money to a borrower whose collateral is a piece of real estate. The more traditional investments like the following have little transparency:
There are an abundance of factors determining stock prices beyond whether or not the actual underlying company is even performing
Fluctuate based on current interest rates
CD’s and Savings Accounts
Relatively safe although this has been questioned somewhat over the past few years with extremely low rates of return. If the return is less than the rate of inflation, you actually lose money.
Browse Trust Deeds For Sale
Trust deeds pay interest rates much higher than bank CDs, bonds or money market funds. Investment returns of 10% or more are attracting investors that are tired or afraid of stock market and mutual fund risks, annuities or the headaches of being a landlord.
If you invest your personal funds, you would receive monthly payments from the borrower until the loan is paid off.
At loan payoff, you would receive the final interest payment, and the return of the balance of your principal.
Why Agoura Hills Financial
Contact Rod Hecker to discuss your investment needs and how Agoura Hills Financial can help you meet your goals! 818.707.3452