Advantages of Investing In Trust Deeds
Why Trust Deeds?
Learn why savvy investors love investing in Trust Deeds for the consistent returns. First off a Trust Deed, also known as a Deed of Trust, transfers legal title in a property to a trustee, which hold it a security for a debt. This is very similar to a mortgage, but the main difference is the number of parties involved. With a Trust Deed there are three: Trustee, Borrower and Lender. With a Mortgage just two parties are involved: Borrower and Lender. This is the single most popular question we get. For more detail please check out Wikipedia‘s page on Deed of Trust
Recording Security For Debt
Trust Deeds are recorded in the county where the property is located as evidence of the security for the loan, just like a mortgage is. Hence the closing process is nearly identical to that of a conventional mortgage. When the debt is fully paid the lender must promptly direct the trustee to transfer the proper back and release release the security for the debt. So investors in Trust Deeds have the same security in a piece of real estate that a bank does when making a loan.
Consistent Cash Flow Every Month
Each time a borrower makes a monthly interest payment that puts money in investors pockets. In addition the return on Trust Deeds will range from 8% to 14%, creating significant cash flow with low risk. Now, if you invest in just one or a few Trust Deeds and one stops paying this can significantly decease the monthly revenue. At Coastal Capital we pool investors monies together and invest in 60 or more Trust Deeds to diversify. If a one or a few borrowers stop paying then cash flow is only minimally effected. There is definitely safety in numbers when it comes to investing in trust deeds!
Faster Foreclosure With Trust Deeds
Foreclosure is often much faster and less expensive with Trust Deeds than Mortgages. When a borrowers fails to pay a quick foreclosure process often motivates the debtor to make their payments! No one likes to foreclose on a property but when its required a quick and inexpensive process is appreciative. For investors this means that their cash is not sitting idle in a long, drawn out process and is earning interest in a performing loan. In addition, investors have to outlay on a minimal amount of legal expenses to complete the foreclosure process.
Ready To Start Investing In Trust Deeds?
If you’re ready to start enjoying way above average returns on your investments that are all backed by real property pease reach out to us. We always enjoy educating our investors on our specific investing strategies. Or for more detail on Coastal Capital check out or Investor page.