If you are wondering what a Trust Deed is and how you can make money with this type of investment, then you have come to the right place. Investing in first trust deeds is an excellent way to add an additional stream of revenue to your income. Why are trust deeds such a hot commodity? Simple, the banks have tightened up their purse strings, leaving many an investor out in the cold and with nowhere to turn to get the money they need to close their real estate transactions.

First Things First

In order to fully grasp the potential of investing in trust deeds, it is imperative that you first understand what it is. A trust deed is, by definition, an instrument by which the legal title to real property can be transferred to one party from another; it is usually held by a "trustee," who holds it until the consideration upon which it was transferred is satisfied, or paid in full. At this point, the trust deed would transfer back to the buyer, or owner.

Make Money Investing in Trust Deeds

When investing in trust deeds, you essentially become a private money source for real estate investors who are looking for funds with which to purchase, rehabilitate and resell properties. Typically, this type of investment will yield anywhere from 9 to 12 percent on the note, with typical short term notes set to mature within 9 months, allowing you to quickly rollover your funds into another trust deed. There are also investing options that mature in a few years, if you prefer to have a steady stream of revenue over a longer time frame. From an investing standpoint, regardless of the term you ultimately choose, trust deeds represent a safe way to diversify your investment portfolio.

In Closing

So now you no longer have to wonder what a trust deed is; you know what it is and, furthermore, you know how to utilize them to generate additional income for yourself. Of course, as is the case with any type of investment, the property you choose to invest in must be financially sound in order to generate profits. For that reason, make sure that you look at all of your options and, more importantly, align yourself with a reputable private money lender who understands this sensitive market and who depends on your success to further build on their own.