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Hard Money Lender Investors

Finding High Yield Investment Opportunities in California

Posted by Ken Meyer on Tue, May 21, 2013

california real estate

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.

With these facts said, it is still exciting to find an outstanding high-yield investment that does not seem to pose many of the traditional risks. Finding these deals, however, usually requires years of hard work, industry connections and just sheer luck. In fact, in the majority of cases, it is just plain impossible for the average investor to happen upon these types of investments.

Fortunately, there is a platform where accredited investors can examine scrutinized real estate investment deals and the developers behind them. These deals, put together by private money lending institutions, run the gamut from small residential deals to large commercial ones.

Why Borrowers Use Trust Deed Investing?

Trust deed investments look and act a lot like traditional real estate investment deals but they all share a common trait. Traditional lending institutions are not interested in their deal for one reason or another. The deal may not fit the lending criteria of the bank, involve too many parties or just be too hard to understand.

For this reason, the borrowers turn to private lenders who can make an informed decision based on their experience and on the merits of the deal and not some governmental metric or the whims of a corporate oversight board. Private money loans are just an alternative route to available investment capital.

The Benefits to Lenders of Trust Deed Investing

The borrowers who approach private money lenders are not naïve. They understand that their deals pose more risk than a traditional single family mortgage. For this reason, they offer a host of guarantees and incentives to the lender. These include:

  • Higher than usual yields ranging from 7-12%
  • Loans secured by real property
  • Through verification process including appraisals, inspections and legal documentation
  • Convenient servicing options 

The Bottom Line

In short, first trust deeds are high yield investments that mitigate much of their risk. They can be utilized as a portion of a portfolio or as a stand-alone investment. Investors with even a medium risk tolerance will find them a valuable addition to their investment strategy.


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