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What is Trust Deed Investing and is it Right For Me?

Posted by Ken Meyer on Mon, Feb 27, 2012

Many of yesterday's sure-fire investments now seem inadequate at best and precarious atTrust Deed Investing worst. Five-year CDs currently yield slightly over 1%, and ten-year U.S. Treasury Notes only get you 1.98%. Even the Dow Jones over the last five years has yielded less than 1%. Despite these dismal figures, you have a responsibility to yourself and your family to provide for your future.

Clearly, treasury notes, the stock market, bonds, and CDs won't get you the kinds of gains you're looking for. If you're tired of anemic returns, take a look at trust deed investments.

What is Trust Deed Investing?

Simply put, trust deed investing is investing in loans secured by real estate. Because of the current dismal housing and mortgage situation, this segment of the market is a window of opportunity. Banks have a surplus of bad loans on their books because of the housing collapse, so they're focusing on issuing only the safest of loans.

These "safe" loans generally include houses in very good condition, but unfortunately, there are many foreclosed homes out there that are battered and in need of repair. Investors want to buy up these battered properties, renovate them, and make quick profits, but banks consider these loans to be risky. That's where trust deed investments and their appealing benefits come into play.

Benefits of Trust Deed Investing

Loan Terms are Short. Most traditional real estate loans last 15, 20, or 30 years. That would be a long time for investors to wait for their payoffs; but fortunately, trust deed loans are much, much shorter. Trust deed loans usually mature in just one to five years since investors only need the loans long enough to fix up the property and sell it. Since you don't have to wait long for your investment to mature, you can realize your gains and move on to your next investment.

Interest Rates are High. As mentioned earlier, the Dow Jones has yielded about 1% over the past five years, and CDs, bonds, and treasury notes haven't performed much better. These investments haven't even kept up with inflation. However, many trust deed investors have been getting returns in the double digits. Why are people willing to pay such high interest rates for trust deed loans? They know the length of the loan is short, and they're willing to pay a premium for privately funded loans. Trust deed investors reap the benefits of these market conditions.

Real Estate Makes for Solid Investments. Many people like the idea of investing in real estate because they're investing in something tangible--something with real value. If you're not interested in being a hands-on, paint-on-your-clothes real estate investor, trust deed investing gives you a chance to participate from a more comfortable vantage point. Trust deed investing also helps you to diversify your investment portfolio. Money you invest in stocks can disappear overnight, but real estate is a hard asset that will still be with you tomorrow and the future.

If you're looking for a more attractive investment than your current CDs and mutual funds, you owe it to yourself to look into trust deed investing. It's an opportunity to take a sour economic climate and invest wisely to provide security for your future. Funding real estate renovations also helps to revitalize your community and restore it to its pre-recession state. If you're tired of earning measly returns on your hard-earned cash, consider trust deed investments.


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