If an investor planning to make a reliable and safe real estate investment then Trust deed investment is the ideal choice as relatively low risks involved. Trust Deed Investment for real estate is a type of investment in loans that are secured and backed by real estate. It means if the borrower defaults on the loan, the property goes in hands of the investor who in turn can sell it to regain as his initial investment. A trust deed investment for real estate is usually a short-term loan that matures anytime not later than five years but mostly in six months to two years.
This type of loan is available to investors who specialize in real estate and need financing to purchase a rental property, carry out repairs on a property before flipping it or rehabilitate an existing property. Many real estate investors buy distressed properties at a discounted price to repair and resell for a reasonable profit.
Banks do not usually grant loan requests to this market mainly because of the recession experience when they had terrible real estate loans on their records. Consequently, banks would not issue any real estate loan that does not meet strict set criteria, which requires that the property that will serve as collateral be in move-in ready condition.
As a result of this development, real estate investors do not have any option left that to source for funding through the trust deed investment model. However, lenders in this market could charge higher interest rates compared to the traditional mortgage market.
California Real Estate Investment Borrowers
Borrowers using the trust deed investment for California real estate are referred to as hard money borrowers. They have experience in the real estate market and always plan to make a significant return on investment. Because of their readiness to make a deal, they are willing to pay a higher interest rate for a quick and convenient source of capital that can help them make a deal happen.
Most of these borrowers are willing to pay as much as a low double-digit interest rate to lenders since they are targeting a return of 20% to 50% on their investment. The interest rate they pay does not affect their expected returns.
Why Choose California Trust Deed Investment for Real Estate?
California Trust deed investment for real estate offers a high yield with comparatively low risk to investors. Many trust deed investors earn high single-digit annual returns that are paid every month, even though some investors make returns that are higher than 10%.
Trust deed investments are generally a safe investment which includes an excellent income strategy to earn high yields and consistent monthly cash flow using real estate as security. Trust deed investors are usually protected in case a borrower defaults in paying the loan. There is a margin of safety, which is defined by the difference between the value of the property and the loan amount. The lender can foreclose on the property; sell it to recoup the investment and outstanding interest. Investors’ money is always protected because they will be listed in the deed as the lenders and they will hold first lien position.
California Real Estate Investment Company
Several ways are available to invest in the trust deed. One method is to source for a loan personally and lend the money directly to investors in the real estate or invest in a fund that invests with trust deeds. A large number of trust deed investors depend on brokers such as CATD Investments in California to offer them the best opportunities.
When you need help with California real estate investment in trust deeds, Contact us today or call us now at 818.865.1570 to have a respite. CATD (California Trust Deed Investments) is a specialist company in California with the interests of our clients in mind. We will help you grow your real estate investment as safely as possible.