Everyday I run into people that tell me their 401k from a prior job or some savings they have is just sitting with little to no return. They feel that investing is for everyone else, not for them.
I can’t understand this line of thinking!
Start with trust deed investing:
Here’s one suggestion that is a great place to start. While all promise the world when it comes to returns and security, none of them are really worth more than the paper they are printed on. For that kind of security, you need a “real” asset like real estate.
Some investors, however, are leery of becoming a landlord and having to actively manage a real estate property. There seems to be no end to the details that must be managed and dealing with “bad” tenants is also not their “cup of tea.” Fortunately, for those in the know, there is an ideal combination of the two with real security and above average returns in a passive investment vehicle – first trust deeds.
First Trust Deeds
A first deed of trust is a document that secures a loan with real property. Trust deeds work like a mortgage with one major difference: if defaulted, the house or property can be foreclosed upon without a court ruling. The first deed of trust applies to the first loan that is taken out against a real property; any loan thereafter is referred to in numerical order (e.g., second deed of trust).Typically offered by private investment firms, first trust deeds are loans made by an investor against the collateral of a real property such as a non-owner occupied SFR, commercial building or a multifamily dwelling. They come in a variety of terms, interest rates and, most importantly, can be customized to fit the needs of both the investor and the borrower. Simply put, they are a great investment.
Security is Paramount
First trust deeds offer unparalleled security. First, they are written and executed with the same legal safeguards and due diligence as traditional mortgages. Appraisals, inspection and escrow money are involved in every transaction. They are a legally binding contract in every way, shape and form.
Secondly, the deed is secured by the property and cannot be superseded by any other private individual. In other words, the investors’ interest in the property is safeguarded like no others. If a default occurs, the investor can foreclose and then sell the property himself.
Lastly, the people involved in these transactions – from the investors and borrowers to the intermediaries – are usually seasoned investors and can spot any peculiarities in a deal and handle them before they become a problem. In short, first trust deeds offer an excellent investment opportunity for those people looking for an uncomplicated but great investment with very real collateral and a superior return.