A Trust Deed investment is a loan of your money to a property owner secured by that property owner's real estate. Unlike stocks and bonds, it's a secured investment, secured by a hard asset and provides an interest rate far and above any CD's on the market. It's an excellent vehicle for growing as well as maintaining wealth. Most Trust Deeds have a rate from about 7 to 12% fixed and are usually short term loans, from 6 months to three years, or they can be longer if both parties agree. In California, the document that secures your loan by the real estate is called a Deed of Trust. It's recorded in the County Recorder's Office and becomes public record. That document names a Trustee that can be notified by the lender in the case of payments not being made and gives that Trustee the right to foreclose on the borrower's property.
You can use money from your self-directed IRA or Keogh, your pension plan, a family partnership, private real estate investment trust, savings account or mattress money to invest in Trust Deeds. You can take your money out of your bank IRA, put it in a self directed IRA and invest it in Trust Deeds for a secured investment and a giant increase in earnings. Put it with a licensed mortgage broker who has a hard money company and has been in business for many years and has hundreds of private investors online. He or she can usually help you move your money.
A Trust Deed secures the loan but doesn't necessarily make it a good investment. They are two separate things. You should only deal with a licensed Mortgage Broker who will supply you with a full and complete package with the California Mortgage Loan Disclosure, the very recent appraisal with color pictures, a preliminary title report, financial information and credit report on the borrower, copies of the signed loan documents, your lender documents and all the information you need for your due diligence, including copies of any leases for a commercial property. Sometimes these documents will come to you in stages as the loan progresses.
As long as the borrower makes the payments on time and regularly, all is well.
That is usually the case... http://youtu.be/Vfe-v5aK55Y