Investments 101

Basics in Trust Deed Investing

Trust deed investing is the lending of money with real estate as collateral. In California, most loans against real estate are called “Trust Deeds,” after the name of the legal instrument used to pledge their security. With expert guidance from Pacific Investment Management Group, anyone can successfully invest in trust deeds. This contrasts with most other investments where extensive study and years of experience may be necessary before you can invest with confidence. Trust Deeds are safer than most other investments of comparable yield because the risks are identifiable, as are the procedures necessary to mitigate them. Many investors, especially retired people, appreciate the relatively minor effort needed to manage the investment once established.

The typical trust deed investor is seeking a competitive return on their investment. Because the interest rate the borrower pays is generally higher than that which the borrower would pay at a bank, the investor, in turn, receives a higher return. Additionally, the money invested in the loan is secured by the borrower’s equity in their real estate. The security, the good return, plus the monthly cash flow make trust deeds an excellent investment vehicle.

Mortgage Fund Investing

A mortgage fund is a safer and more lucrative way to take advantage of investing in trust deeds, as it avoids some of the drawbacks associated with individual trust deed investing. Some of the benefits of investing through a fund are:

Your investment is pooled with other investor capital, spreading your investment risk over the entire portfolio of loans rather than fixing it to one specific property.
Professional fund managers provide the due diligence required to make a wise and safe trust deed investment, relieving the investor of the time and effort involved in performing this research, and thus eliminating stress.
A fund has the ability to leverage the portfolio, with the objective of more than offsetting fund management fees and increasing returns.

Whether you wish to invest your money into a specific real estate mortgage or into a mortgage pool, as the originator, PMF handles the entire process from beginning to end.