Why Trust Deed Investing Is The Way To Go

By Leanne Goff

Trust deed investing is basically investing in a load secured by real estate. It is similar to the investment in the traditional mortgages with the significant differences being that this form of investment involves three parties being a borrower, a trustee and a lender while only two parties-a borrower and a lender are involved in traditional mortgages. A third party known as a trustee has the responsibility of holding the security on behalf of the lender till full settlement of the loan is done.

The investor has an opportunity to either purchase existing promissory notes or make a direct investment. A deed of trust is drafted and signed by both parties to be legally binding and work as a proof of an existence of the loan.

Promissory note on the other hand is a document that details the promise by the borrower to repay the loan. It is in this document where all the terms in a particular trust deed investment will be found. Other details such as amount, interest rates, maturity date, payment frequencies and even penalties are also indicated in this document.

The process of trust deed investment is easy with beginners finding it highly attractive. This has to do with the straight forward investment steps followed and the low risk associated with it. A prospective lender (investor) starts by selecting the best option from the available investments listed on the Browse Note section online. A simple form is then filled by the investor as an expression of interest.

Given that and investor has an opportunity to diversify with both the long and short term loans, it is possible to suit the investment strategies desired without necessarily increasing the risks as each of the investment opportunity is analyzed individually. The whole process basically provides fun in the investing with no hassle for either the beginner or the masters.

A package for each of the chosen option will be then sent to the prospective investor for analysis and signing before the same is sent back to the Superior in charge. A public recording can then be done following the closing of all the transactions. In this step, all the parties get hold of copies of all the related documents such as the copies of the deed of trust, promissory note, insurance certificate and security title copy. The payment of first installment is done on the first month or as required by the terms of payment. The investor can access and view the portfolio as wished from this point.

The prospective investor will then be required to go through the loan package for the each of the options chosen, review them and then return them to the Superior after signing. The public recording will then follow after the closing of transactions after which the investor gets the receipt of funds deposited in addition to a copy of the promissory note, recorded deed of trust, title insurance and insurance certificate all in copies. The loan funding happens when the borrower makes first installment there after which it is possible to view loan portfolio any time.

In most of the trust deed investing options, investors earn very high single digit returns with some investors boasting of up to two digit interest rates. This high returns in addition to low risk basically explains why this type of investment is quickly gaining popularity. The major setback however has to do with the liquidity of these loans. An investor has no opportunity to get back his investment at the moment he considers it necessary as there are terms of agreement to be followed to later.

About the Author:

You can visit the website www.investtrustdeeds.com for more helpful information about What Does It Take In Trust Deed Investing?