Every savvy investor should understand the inverse relationship that exists between the emerging risk of a deal and its potential reward. It is neither wise to downplay the negatives nor overstate the positives. Instead a prudent approach and an understanding of one’s risk tolerance should inform the deal.

Finding affordable and readily available investment funds for real estate deals can be a daunting and unrewarding task. The vast majority of traditional lending institutions are bound by government regulations and internal oversight committees.

These days, the newspapers, online financial forums and other news outlets are full of stories about Ponzi schemes, fake investment deals and other sorts of scams. While many of the schemes involved high-tech companies or convoluted financial vehicles, the real estate world was not immune and many investors lost sizable amounts of money to real estate investment scams. 

When you're looking to finance a real estate investment, you have two choices for your leverage. You can go to a bank, or you can go to private real estate lenders. The two types of lenders have very different approaches to lending, and both can be a good fit depending on what you're trying to do.

Financing investment properties lets you be a part of our current real estate market's growth. You can make returns that, in many cases, are comparable to what the buyers are making without having to buy properties, make repairs and deal with ownership. While financing an investment property may be easier than swinging a hammer, it's not without its challenges. Before making loans to investors, consider these six questions:

For many real estate investors, finding the right property and negotiating the best deal is a challenging and rewarding process. Finding the money, however, to finally consummate the deal is a somewhat daunting ask and often more than a little trouble.

Owning real estate investment property isn't like owning stocks or bonds. You usually get better tax benefits. You potentially get higher returns. And you get to manage a business. Rental properties are really small businesses that require careful attention to run successfully.

This is a guest post by Angie Picardo, a staff writer for NerdWallet. Her mission is to help consumers stay financially savvy.

When you're looking to buy investment property, there are two key metrics that you need to carefully analyze. Paying attention to comparable sales prices will help protect you from overpaying for a property relative to the rest of the market. Calculating your returns, though, will help ensure that every deal you buy is worth buying on its own merits, regardless of what other people in the market are doing.

At its most basic level, investing is the process by which a person trades risk for profit. Like any investment, underwriting trust deeds does carry some risk of the loss of your money, usually from an investor not making his loan payments or failing to refinance at the end of the trust deed's life. Done right, though, trust deed investments can be extremely safe, especially given the high returns that they generate. Here is a five-step process to making an investment that is profitable and as safe as possible: