When a bank makes a first mortgage on a borrower's house or office building, it usually secures the loan with a deed of trust or a trust deed (same thing). A trust deed is very similar to a mortgage, except the lender can foreclose on a trust deed without going to court. This makes the foreclosure faster. If the borrower doesn't make his loan payments, the bank can foreclose on the property.
Private investors are also allowed to loan money, as long as the interest rate is not usurious (sorry, Tony Soprano). These private investors are absolutely allowed to secure their loans with a trust deed (mortgage) against the borrower's property. If the borrower doesn't make his payments, the private investor can foreclose on the property, just like a bank.
Many, many private investors in California reguarly make loans secured by trust deeds (mortgages). It's a billion dollar industry. Assuming the loans pay as agreed (investing in trust deeds involves substantial risk), the investors typically earn between 10% to 12% interest.
If you are an accredited California investor and you would like more information about investing in trust deeds, please click here.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment