Trust deed investors make investments in loans that are backed up by real estate. These loans tend to operate on the short-term, maturing in under five years, with the bulk of loans spanning from one to three years in duration. These investments are especially useful for investors who are looking to fix and flip distressed homes or use the capital as a bridge.
Trust deed investments offer attractive yields and low risk. A savvy trust deed investor can earn significant monthly returns on their investment, sometimes as high as 10%. This is liquid cash that can be put to use on restoring or refurbishing a property. The margin of safety that goes along with trust deed investing significantly mitigates risk.
Simply put, the margin of safety is the difference between the loan amount and the value of the property. The central philosophy of trust deed investing is that, in situations where the borrower does not satisfy expectations, the lender may foreclose the property and sell it in order to make up the difference. In this way, neither party stands to lose much money in a foreclosure situation.
Returns can range from 7% to 15% depending on various factors. Generally, loans with higher risk potential can be expected to generate higher returns. By investing through Alta, you’ll be investing with the some of the most trusted professionals in the business.
At Alta Equities, we thoroughly document and vet all of our loans. Your name or your company’s name will appear on the deed as the lender. We make sure that your lien position is always first. This ensures that, if the borrower defaults on the loan, you will get paid first.
For each of our loans, Alta Equities requires CLTA insurance from the title company. We also require fire and homeowner insurance to be paid in escrow. This provides additional protection in the event of property damage.
We require all of our borrowers to invest his or her own money in the property. This ensures that, in the event of a foreclosure, all attorney fees and interest payments will be covered.