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Trust Deed Investment Paths and Outcomes

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Visit http://ArixaCapital.com for more on Trust Deed Investing This podcast gets to the heart of what outcomes the trust deed investor must be prepared for. There are two main outcomes: (1) get paid back, on time, with interest; and (2) borrower fails to perform, in which case there is a default and lender pursues a foreclosure to protect lender's interests. Within this second outcome, there are two sub-paths: (2a) foreclosure auction takes place, and the lender is outbid by another investor, in which case the lender gets paid back, with interest and reimbursement of attorney's fees; or (2b) lender is the highest bidder at the foreclosure sale in which case lender owns the property after the foreclosure sale. Lender can then hire a broker to sell the property. If the loan wasn't excessively large relative to the value of the property, lender should ultimately get his or her money back, with an attractive return, to compensate for the hassle and work involved in foreclosing and having to hire a broker and sell the property.
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Text Comments (3)
Arixa Capital (7 years ago)
@colettehollander The amount of time varies by state. In California, it takes about four months to foreclose, if the lender takes action immediately at the time of the default. The property is then fixed up, if necessary, and listed for sale. The selling process itself should take 45-60 days if the property is priced properly.
Colette Hollander (7 years ago)
How long does it take to exit a trust deed investment in which the borrower defaults?
misterwheeler (7 years ago)
Great lecture. I love the illustrations. Where can I find your book?

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