TRUST DEED INVESTING

TRUST DEED INVESTOR

by loaning private funds on real estate

•a person seeking a competitive rate of return

• loans are secured by real estate

TRUST DEED INVESTOR

•makes a higher interest yield

• is secured by the borrower’s equity in the real estate transaction

AMOUNT OF MONEY NEEDED TO START

California Bureau of Real Estate

• No one trust deed can be more than 10% of your net worth

• released new guidelines via SB978 in 2013

AMOUNT OF MONEY NEEDED TO START

• requires brokers to have investors fill out an Investor Questionnaire

• brokers are being audited by a third party auditor that reports back to the CBE on a quarterly basis

• CBE expects this form to be on file for each transaction

• was created to ensure each investment is "suitable" for the investor

AMOUNT OF MONEY NEEDED TO START

• Information asked are:

• name

• contact info

• education

• experience

• income

• net worth

• liquid capital

• goals for the investment

FOLLOWING CAN BE USED TO PLACE FUNDS:

• IRAs

• Self-directed IRAs

•Roth IRAs

• Several other retirement account

PROPERTIES LOANED:

•9% trust deed program

• Five-year term

• Single Family

• Non-owner occupied homes

that have been fixed and

rented by an investor

PROPERTIES LOANED:

•11% trust deed program

• One-year term

• Single Family

• Non-owner occupied homes

that are typically in disrepair and will be fixed

and resold to a retail buyer

PROPERTIES LOANED:

•12% trust deed investments

• One-year term

• new construction

• borrower is building

a new property with the intent to resell

ANNUALIZED YIELD

will depend on the length of individual investment and the availability of a property for rollover

FRACTIONIZED LOANS

considers immediate family members, entities, and family trusts

USURY LAWS AT THE CALIFORNIA OFFICE OF THE ATTORNEY GENERAL

Regulations require a professional broker to obtain higher returns and for trust

deed investors

ADVANTAGES OF WORKING WITH A PROFESSIONAL AND EXPERIENCED BROKER:

• expands the marketplace for you

• allows you to make higher annual returns

• lowers your risk

• saves you time

• ultimately increases your return tremendously

SERVICING

lender charges servicing fee annually on all programs

LOAN SERVICINGincludes:

• back-office tasks of collecting

payments from borrowers

• disbursing payments to the investor

• mailing required notices and

statements

• year-end tax documents for the IRS and

franchise tax board

• maintaining adequate borrower insurance coverage

• coordinating foreclosure proceedings if necessary (rare)

TRIFECTA OF ESTATE PLANNING:

1. tax advisor

2. financial or retirement planner

3. your attorney

TRUST DEED INVESTORS CAN BE:

• Private individuals

• Corporations

• pension plans

• 401K

• Custodianships

• LLCs

• retirement funds

• IRAs

TRUST DEED INVESTORS CAN BE:

• Roth IRAs

• Self-Directed IRAs

• Charitable Remainder Trusts (CRTs)

• Foundations

• Endowments

• Family trusts

• Family members

• SEP accounts

FIRE INSURANCE• Is required

• Investor is required to inform the instance company that the property is vacant

• require coverage in the amount of the loan or replacement guarantee

INDEPENDENT APPRAISAL

• a copy of the appraisal along

• is prepared by the time the property is presented for funding

with the address will be sent for the investor to view the

property