Contact Info

Address:

10811 Washington Blvd, Suite 370
Culver City, CA 90232

Phone:

(310) 280-9173

Email:

Chris@CoastalCapital.com
Scott@CoastalCapital.com

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How To Become A Bank With Your IRA & Earn Consistent Stable Returns

The concept of banking is quite simple: The bank pays interest to customers who deposit money and charges a higher interest to those who borrow (that is secured by low-risk real estate.) This same strategy is available to all investors through trust deed investing who can consistently earn 12% annually with little risk. Earning consistent stable returns month after month.
The concept is foreign to many, but it’s actually already in practice and isn’t as complicated as you might assume. The strategy is known as “trust-deeds investing,” through which many investors have become one-person banks using self-managed retirement funds.

What Is a Trust-Deed Investment?

Quite plainly, a trust deed investment is when an individual lends money to a borrower for a real estate purchase. When you invest in trust deeds, you act as a lender and offer financing to a property owner. The loan is secured with a property, and in the event of default its title transfers to you, the lender, through foreclosure.
To complete the lending process, the borrower will sign two documents: a deed of trust and a promissory note. The deed of trust is signed by the borrower and recorded a normal escrow process, so you are secured. This is a public record of the debt which makes sure that the lender will be repaid if the property is sold. The promissory note is kept by the investor or lender and contains the loan information, including the terms, interest rates, and payment schedule.

The Benefits of Trust Deed Investment

The benefits of this investment option are numerous. First, it allows investors to earn a steady income. The interest is predetermined when you issue the loan — in contrast with other forms of investments — so your income is predictable and secured.
Another advantage of investing in trust deeds is the passive nature of this strategy. Even though it is a type of real-estate investment, you have no landlord responsibility. You are simply a lender, which means no dealing with tenants or property maintenance and repairs. You collect interest even when the rental property is vacant.
The fact that you are somewhat removed from the property — by virtue of being only a lender and not a property owner — also makes trust deeds a great choice for retirement accounts, which require account owners to keep all investments at arm’s length.

Trust Deed Investments with a Self-Directed IRA

Trust deeds often come with interest rates of up to 10 to 14%, which is comparable to the 10% historical average annual return of the S&P500. Plus, the risk is lower with the loan secured by a property. Adding trust deeds to a retirement plan could be a great way to diversify and improve the overall rate of return for investors.

Traditional retirement plans, however, do not allow the additions of alternative assets like trust deeds. The solution is to use a self-directed IRA or Solo 401k and other similar retirement accounts, which give account owners virtually unlimited investment choices. Unlike conventional retirement accounts that tend to limit investment options to stocks, self-directed ones can invest in nontraditional assets such as commercial and residential real estate, precious metals, trust deeds and much more. Here at Coastal Capital, we partner with The Entrust Group one of the largest and most trusted self-directed IRA management companies. If you need assistance in transferring funds from your current IRA we can help facilitate. 

Open the Door to Modern Real Estate Investment

Earn Consistent Stable Returns
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Self-Directed IRA Investments Can Truly Diversify Your Portfolio

Looking for a way to get more bang for your investment in your retirement savings? A self-directed IRA (SDIRA) could be the answer to diversify your investments.

What is a Self-Directed IRA?

Self-Directed IRA (SDIRA) is quite simply, an IRA. All IRAs abide by the same laws and possess the same capabilities. Unlike other IRAs held at banks, brokerage firms and other institutions, with a SDIRA, you’re not limited to stocks, bonds, or mutual funds. This means you can invest in virtually any asset including private funds, trustee notes and even crypto.

What are the benefits?

A Self-Directed IRA gives you the opportunity to build a more diversified and resilient portfolio. It allows you to take advantage of alternative investments such as real estate, precious metals, private equity, notes, and more. A custodian/administrator is required to do the record keeping for the assets in your account, but nothing moves in or out of it without your direction. You decide how much, when, and most of all, what to invest in, giving you the freedom to invest in what you know best.

Investing in Real Estate With a Self-Directed IRA

Real Estate is a popular investment among SDIRA holders because it is a tangible asset that people know and trust. With a SDIRA, you can invest in a wide range of real estate assets: residential or commercial properties, developed or undeveloped land, condos, hotels, mortgage notes, and more. Depending on what type of account you choose, earnings can continue to be either tax-free or tax-deferred.

How does investing a SDIRA in real estate work? Imagine you purchased a single-family property through your SDIRA. If you chose to sell it, your profits would go directly to your IRA. Alternatively, were you to rent out that same house, your income would go back into your IRA and any related expenses would be paid from your IRA. For more information about how to use your SDIRA to purchase a rental property, go here.

The level of control and flexibility associated with a SDIRA does come with its own set of responsibilities. For example, investments made with your SDIRA are owned by your SDIRA, not by you personally, making self-dealing prohibited. Click here for more information on SDIRA rules.

Getting Started With Investing In A Self-Directed IRA

The first step is to decide what type of account you want to open. Then, establish how you’ll fund it, and decide what your investment strategy will be. Speaking with a legal and/or tax advisor before you begin can help you to answer these questions.If a SDIRA sounds like it could be the answer to your retirement questions, get your copy of The Entrust Group’s Self-Directed IRAs Basics Guide today.

Many of our investors at Coastal Capital utilize this Self-Directed IRA Investments option with The Entrust Group to build safe, above average returns for their nest egg. To learn more about the fund please visit us here.

Tenants Not Paying Rent Due to COVID-19? Look to Hard-Money Loans

A hard money loan can provide quick relief

Real estate is interconnected with so many other industries, it’s not surprising that the real estate market is going through some ups and downs during COVID-19. Some landlords are finding themselves in tight spots when renters can’t keep up with their monthly payments. If you find yourself in such a situation, you might be able to negotiate with your mortgage lender, but many property owners are finding this to be a dead end after following a long rabbit hole. Fortunately, hard-money loans offer a viable alternative.

Especially in California landlords are facing challenges

Due to zealous restrictions, approximately 3 million California residents are unemployed, and about 1 million of those are renters. This naturally impacts their ability to pay their rent on time and in full. With about one in seven households struggling to pay their rent, many landlords are seeing the impact. Even though the unemployment rate is improving, it’s still in the double digits. Many tenants are still struggling to keep up.

For landlords with commercial tenants, it depends on the types of properties you own. For example, many bars, restaurants, and salons are suffering right now. They simply are not bring in the same revenue as before. However, if your properties are home to essential businesses that are thriving during this time, collecting rent payments might not be an issue.

Tenant protections in California

The recent tenant and landlord protection legislation prevents landlords from evicting tenants through Feb. 21, 2021. The law says that missed rent payments due to COVID-19 but how can you verify? Between Sept. 1, 2020, and Jan. 31, 2021, tenants must pay at least 25 percent of their rent to qualify for this protection. For most property owners, that’s not enough. It’s true that tenants aren’t completely off the hook—landlords can start recovering debt in March. But what are landlords to do about the months in between?

In addition any landlords are lowering rents for a period of time for existing tenants and offering discounts in order to entice new tenants to rent vacant spaces. Incentives include free rent for one month, free parking, and more. Such offers might get new tenants in the door or keep existing renters in the building. However these types of concessions put a dent in landlords’ wallets.

How a hard money loan can help during the COVID-19 pandemic

Hard money loans are based on your equity in the property, not on your personal financial history or credit score. This means that if you have enough equity, you can get a hard-money loan to cover the gap. Even if you can’t secure a traditional bank loan with enough equity you can get cash in a week.

These trust deeds are designed to provide short-term capital to help you cover the mortgage and related expenses until you’re able to generate more rental revenue. Most importantly hard money loans enable property owners to keep current on their mortgages, avoiding expensive late fees and expensive default interest charges. Often the costs with obtaining a small hard money loan far outweigh the costs of going into default on a property.

Coastal Capital Group is here for you

If you have tenants who aren’t able to keep up with their rent, Coastal Capital allows you to use your equity to secure cash. Hard money loans close fast—think days, not weeks—so you can keep up with your monthly payments even if your renters can’t. For more information and to learn more please Apply today.

Fix and Flip Financing

Get a loan to flip a house, with the right lender.

Payment Histories Increase Note Values

Want top dollar when selling mortgage notes?
Increase the value with payment histories!

Can I Sell Part of My Mortgage Note?

Owner Financing doesn’t have to mean waiting years or decades to receive money.
Sellers have the choice to sell all or just part of their future payments for cash today.

Safe Seller Financing Tips

It’s a tough time to sell a house.
Hoping to stand out from the crowd, sellers are advertising “Owner Will Finance!”
Accepting payments over time provides buyers an alternative to bank financing. Of course sellers don’t want to trade a house that won’t sell for a buyer that won’t pay.

Use Outside Closings To Sell Mortgage Notes!

When an investor has performed their research and is ready to purchase a private mortgage note they will ask the seller to deliver original documents (note, recorded mortgage, etc.) and sign the transfer package.

What is Seller Financing?

When a seller allows a buyer to make payments over time for the purchase of property, it is known as owner financing or seller financing.

This private financing by the seller can take the place of a bank loan or be in addition to a conventional mortgage.

The payment amount, interest rate, and other terms are agreed upon between the buyer and seller. The amount financed by the seller will depend upon the buyer’s down payment and whether there are any bank loans.

Here’s an example of how seller financing works…

  • A property owner advertises his or her house for sale, either on her own or through an agent.
  • A buyer makes an offer, and they agree upon a sales price of $175,000 with a 10 percent down payment of $17,500.
  • Rather than requiring the buyer to obtain a bank loan, the seller carries back the balance of $157,500 in the form of a note and mortgage. It could also be a note and deed of trust or a real estate contract, depending on the customary documents for that state.
  • The note spells out the terms of repayment. In this case they agree upon 8.5 percent interest at $1,211.04 per month based on a 360-month amortization. The seller doesn’t really want to wait a full 30 years for payments, so the note requires payment in full, known as a balloon payment, within seven years.
  • A title company or real estate attorney is used for the closing to be sure all parties are protected and the documents are in compliance with and state laws.

Bank Loan Vs Seller Financed Mortgage Notes

Because the buyer is making payments to the seller rather than an institutional lender, the legal arrangement is called a private mortgage, seller carry-back, installment sale, or owner financing.

The seller has the same mortgage rights as a bank, so if the buyer does not make payments, the seller can foreclose and take the property back.

When the seller prefers cash today rather than payments over time, the rights to future payments can be sold or assigned to a note investor on the secondary market.

Seller Financed Notes and Interest Rates

The interest rate a seller agrees to accept when providing owner financing to the buyer has a large impact on the note’s value. Unfortunately, many sellers overlook this important decision.

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