Make Passive Income Now: Trust Deed Investing 101
This Trust Deed Investing 101 will help you discover the benefits of trust deed investing. Trust deed investing is a great way to make passive income from real estate investments without any of the hassles. With a trust deed investment the investor is acting like a bank by lending money to a borrower and the loan is secured by real estate. The investor is able to earn a steady stream of passive income while securing those funds with the underlying real estate asset. Here’s why you should Start Trust Deed Investing:
What is a trust deed investment?
Trust Deed Investing is when investors invest our money in Trust Deeds secured by real estate. Basically, the investor becomes the bank and they can earn a much higher interest rate than a conventional bank. In the current economic climate, savvy real estate investors are purchasing properties at foreclosure sales for bargain basement prices, refurbishing these properties, and reselling them for a profit. These house-flipping investments take a matter of months which means hard money loans are perfect for these types of investors. Trust deed investors help these real estate investors get financing and make a profit and the trust deed investors make money from the interest rates.
A trust deed investment is a promissory note secured by the deed of trust and is payable to the investors at an agreed upon interest rate, repayment amount and time frame. Communication with the broker and the borrower is important when it comes to trust deed investments and the promissory note should contain all of the rules and conditions agreed upon by the three parties.
In the case of trust deed investments, the investor essentially becomes the bank. With trust deed investments, the borrowers pay you high interest rates. The amount of the interest rate and the specific time of repayment are agreed upon by the borrower and lender and the lender can expect to receive these payments monthly until the loan is paid off. The borrower pays these high interest rates because of the fast service and the ability to bypass the strict regulations of traditional lenders.
Experienced trust deed investors should feel secure in their trust deed investment because it is real estate based. They can negotiate the interest rate, the length of the loan, the late fee, the default interest rate, and the fees. You can always feel safe when it comes to trust deed investing because a trust deed investment is a secured investment. This means that there is an assurance that your money will be in good hands. In the event of a default, the borrower is required to surrender the property to the investor and the property can be sold in order to recoup the initial investment.