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Why Trust Deed Investing is Considered a Safe Bet

Posted by Ken Meyer on Thu, Jan 24, 2013

Trust Deed Investing

The crux of most investing problems is yield versus security. Individuals with a high risk tolerance may opt for the outlandish but extremely risky returns of junk bonds or derivatives. More traditional investors will play it safe and accept subpar returns for the security of CDs of U.S. government bonds.

Still other investors look to the real estate market to generate a more attractive yield while still obtaining the safety of a secured asset; however, there are problems inherent in directly investing in the real estate market.

Many investors may be inexperienced in managing a real estate portfolio or simply don’t want the hassle of renting properties. Trust deed investing offers a safer, high yielding option to all of these investments.

Trust Deed Investing is Safe

Any prudent investor should thoroughly investigate and carefully consider the benefits, especially the safety, of trust deed investing. These financial instruments offer several outstanding features:

  •   Outsized returns for the risk involved
  •   Guaranteed yield
  •   Fully securitized loans backed by a real asset
  •   Loans based on a 60-70 percent loan to value ratio
  •   Experienced management of the loan

The Advantages of First Trust Deeds

Simply stated, first trust deed investing offers an excellent balance of yield versus security. First, the loan amounts and interest rates are dependent on the value of the property and the credit rating of the borrower. These facts guarantee that the borrower will do all in his power to properly service the loan. Nevertheless, in the event of a default, the investor takes possession of the property and can sell at "fire sale" prices and still reap significant capital gains. Further security is provided as the borrower is required to maintain all usual and customary insurance policies.

Similarly, trust deed investing is an excellent option for those investors who no longer wish to actively manage any properties. Reputable, experienced service companies can collect payments, monitor the loans and provide documentation to the investor. Trust deed investing is ideal for a wide variety of passive investors including busy executives, financial novices and retired seniors.

Trust deed investing is, indeed, the safer choice when it comes to any decently yielding investment vehicle. In fact, it is probably even better than investing in the “safety” CDs and government bonds due to the risk of inflation. For the most secure method of safely maximizing your returns, trust deed investing is unmatched.


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