David Kirkpatrick

October 29, 2009

Pros and cons for trust deed investments

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 3:25 am

Are you looking for an investment vehicle combining strong return-on-investment and still considered a secure bet?  Trust deed investments may be the answer. Trust deed investments have the potential to offer high returns relatively safely, but this investment vehicle isn’t for everyone. Like with any investment you should take the time to learn about the pros and cons of trust deed investment.

Trust deed investments come with one major entry on the con side of the balance sheet — very little liquidity. If you need your investment money at a certain time or on short notice trust deed investments are not for you. Another potential con is you might end up owning the property behind your trust deed investment.

The pro side has its one major entry as well, and it’s pretty strong — trust deed investments are one of the safest high-yield investment vehicles out there. With trust deed investments your investment is secured by a deed of trust against a property owned by the borrower of your money. A trust deed investment allows you put money into real estate through an intermediary and typically you only deal with the outlay and return aspect of investing in property.

From the link, eight points from Federal Home Loans Corporation on trust deed investments:

Having provided all the pitfalls and negatives, you should not lose your money in trust deeds. Let’s recap:

  1. Keep your money in the bank if you need it.
  2. You may end up owning the property.
  3. Keep your broker honest; use the title company.
  4. Demand paperwork in your name.
  5. Understand how value is determined.
  6. Invest in first trust deeds only.
  7. Be aware of the occasional requirement for the temporary investment of additional funds.
  8. Adjust with the market.

1 Comment »

  1. […] Pros and cons for Are you looking for an investment vehicle combining strong return-on-investment and still considered a secure bet? Trust deed investments may be the answer. […]

    Pingback by Trust Deeds – Pros and Cons » Tracie Wells — February 16, 2011 @ 1:33 pm


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