How much can I earn?

Let’s do the Math – Say you invest $20,000.00 in a bank at 7% simple interest compounded annually for 20 years it will grow to over $77,000.00 at 7% provided $5,400.00 per year or $451.00 per month for life without touching the principal. Now the same $20,000.00 invested in trust deeds at 14% simple interest compounded annually for the same 20 years will grow to more than $327,000.00 and generate, without touching the principal more than $49,000 per year or more than $4,900 per month and that’s over – yes 9 times more retirement income. The security of the loan is based on its Loan–to-value (LTV) ratio and on the recording of the trust deed against the property.  The lower the loan-to-value ratio and the greater the borrower’s equity, the more incentive for the borrower to protect the equity in the Property. The lower the LTV, the more cushion investors are provided against a drop in real estate values.  For example the value of property with a 50% LTV loan would have to drop in half before an investor would lose a single penny of principal if a borrower were to default.  Recording of the Trust Deed establishes the priority against the property.

How secure is my investment?

You receive a promissory note which is a written promise to pay or repay a certain amount of money at a certain time, or in a certain number of installments, or on demand to a named person. It usually provides for payment of interest, and its payment is secured by a recorded Deed of Trust. The person receiving the loan proceeds (borrower) becomes obligated to repay the debt by signing a promissory note which specifies: (1) the amount of the loan (principal); (2) the interest rate (interest); (3) the amount and frequency of payments (debt service); (4) when the borrower must repay the principal (due date); and (5) the penalties imposed if the borrower fails to timely pay or tender a payment (late charge) or decides to pay a portion or all of the principal prior to the due date (prepayment penalty). The promissory note identifies the borrower and the person who will receive the payments (lender or note holder). Your investment is secured by a Deed of Trust recorded against the title of the borrower’s property (the Property) In a Deed of Trust, the borrower (Trustor) transfers the Property, in trust, to an independent third party (Trustee) who holds conditional title on behalf of the lender or note holder (beneficiary) for the purpose of exercising the following powers: (1) to reconvey the Deed of Trust once the borrower satisfies all obligations under the promissory note; or (2) to sell the Property if the borrower defaults (known as a foreclosure).