Trust Deed Investing – Security plus high yield

The primary reasons for investing in private money trust deeds are their high yield for a short term (up to 5 years), coupled with the security of real property. These high yields are driven by borrowers who are willing to pay premium interest rates for short-term loans that close quickly, with very little of the red tape demanded by conventional lenders.

A variety of circumstances lead borrowers to private money. A sampling of what we see on a daily basis:

• Real estate purchase opportunities with a short escrow
• Reducing the need for equity participation
• Credit challenges
• Unexpected project cost overruns

Every borrower and lending opportunity is unique, and it takes experience and discernment to select the best.

We scrutinize dozens of loan applications before funding a single loan. We then take the utmost of care to ensure each loan is originated, underwritten, and serviced while complying with state and federal regulations, in addition to our own rigorous lending guidelines. It’s this attention to detail that has led to a long-term, successful track record with our investors.

Past performance does not guarantee future returns

3 Ways to Invest in Trust Deeds

On your own

It’s a proven fact that high yield trust deed investing has many benefits over other income investments. But to do it on your own, you must have substantial time and expertise to go through the process of finding projects, evaluating properties, screening borrowers and going through the legalities of each unique real estate transaction. And, if your borrower defaults and you go to foreclosure, even if you make your money back, you can lose your monthly interest payments. In addition, your money is locked up until the loan is paid off, reducing your liquidity.

Fractional Trust Deed Investment Programs

A more popular option for investing in trust deeds is through fractional investment programs. In a fractional program, your money is invested along with other investors in a specific trust deed, secured by real estate. The originator handles the loan process from beginning to end, sourcing the lending opportunity, performing the due diligence and property valuation, and then underwriting, and servicing the loan. You select the loan you wish to finance. When reviewing any fractional program, it is critical that you choose a company that has the expertise and long-term track record to properly manage every detail in the lending process. La Jolla Loans has consistently made high returns for our fractional investors since 1986.

Click here for more information on our Fractional Investment Programs.

Mortgage Fund

A mortgage fund is a great way to take advantage of investing in trust deeds without some of the drawbacks associated with individual trust deed investing. Some of the benefits of investing through a fund:

• Your money goes into a pool of loans, spreading your investment risk over the entire portfolio of loans.
• Professional managers in the fund provide the due diligence required to make a wise trust deed investment, relieving you of the time, effort and experience needed.
• In a fund, your money is always fully invested as opposed to individual trust deed investing where there can be downtime between payoffs and investing in a new trust deed.
• A fund has the ability to partner with institutional investors to leverage the portfolio, with the objective of more than offsetting fund management fees and increasing returns.

Click here for information on the La Jolla Loans Mortgage Fund I, LLC.