Trust Deeds: A Smarter Way to Invest
Trust Deed Investments offer an attractive current yield with relatively low risk. Put simply Trust Deeds are loans secured by real estate, with returns of around 10%. The root idea of Trust Deed investing is that if the borrower does not perform, the lender can foreclose on the property and recoup their investment with interest. In other words, by making sure the loan to value ratio of the loan is properly calculated and sufficiently conservative, then the investor should recover his investment even if the borrower defaults on the loan. All our Trust Deeds have loan to value ratios under 65%, with a majority of them having loan to value ratios under 50%. This 35%-50% plus equity cushion is your safety margin if a borrower defaults. Investors simply don’t find these kind of high returns with such large safety margins in other investment options.
For a detailed look into how and why Trust Deed investments could change your life as well as forever change your perspective on real estate investing continue reading down the page or take a look at this quick condensed video presentation.
Why Trust Deeds are a Great Investment in 2019
Despite the recent large swings in the stock market, the Dow Jones Industrial Average, as of August 2019, is roughly at the same exact levels as it was 12 months ago. A 12 month roller coaster ride for a zero percent return. With this kind of volatility in the stock market and the threat of a pullback so real, many savvy investors have turned to real estate. Real estate has always been a popular and reliable alternative to the stock market for building wealth, after all, real estate is one of the best performing asset classes. One of the main reasons people don’t take advantage of the real estate market is because of the headaches associated with finding, remodeling, maintaining, and renting real estate and the various other annoyances of being a landlord. What if you can invest in real estate without becoming a landlord? Investing in trust deeds frees you from the upkeep and responsibility of real estate while you sit back and collect monthly checks from your investment.
What is a Trust Deed?
A Trust Deed Investment consists of two legal instruments the promissory note and the trust deed. Our first legal instrument is the promissory note. In the promissory note, the borrower (note maker) promises in writing to pay a sum of money to the lender (note holder), under specific terms set forth in the promissory note. The specific terms of a promissory note can include the interest rate, the maturity date, and its repayment terms (e.g. balloon payment or amortized). The promissory note is then secured by a trust deed.
A trust deed (a/k/a deed of trust) is a legal instrument where the legal title in real estate is transferred to a trustee who holds the property as security for a loan between a borrower and a lender. If there is an event of default whereby the borrower is unwilling or unable to pay the lender, the lender can direct the trustee to foreclose on the property under the trust deed’s power of sale clause. Therefore, a trust deed is similar to a mortgage as they are both security instruments. However, trust deeds, unlike mortgages, authorize the trustee to conduct a nonjudicial foreclosure.
Why Fulford Lending
Fulford Lending is unique among Trust Deed brokers because we only offer Trust Deeds that we have already closed and funded with our own money. We always are willing to put our money where our mouth is. We closed and funded these loans because we thought the loan was a good investment for us and because the loan met our rigorous lending requirements. As a natural evolution of our booming lending business, we now now offer these funded loans to other Trust Deed investors. We are finite lenders and can only close so many loans a month before we have to pass on excellent loans. By offering funded loans to Trust Deed investors we are able to free up capital which allows us to close more loans, keep our highly skilled staff working, and generate a better return on our own money. It’s a perfect financial ecosystem which allows you to invest smarter and safer by being able to see the payment history for any Deed of Trust that you are interested in. Would you rather invest in a yet to be funded Trust Deed with an unknown borrower or in an existing Trust Deed with a borrower who has made regular monthly payments for the past 7 months? The answer is simple.