Trust Deed Investment Arizona can help you grow your wealth quickly, but it’s not without risks. Learn about the potential pitfalls, so you can avoid them and make some serious cash.
When a loan is taken out for real estate, a trust deed or deed of trust is often used. It’s mandatory in some states, while others allow for this or a mortgage. The document indicates that the borrower and lender have an agreement and that a neutral third party is holding the property until the loan is paid back.
The lender gives the borrower money to purchase the property and, in exchange, the borrower gives the lender promissory notes tied to the deed of trust. Then, the third party, typically an escrow or title company, serves as a trustee and holds the legal title. The borrower ultimately remains responsible for the property and has full rights to obtain it. This is normally the natural course of things; the borrower pays his or her debt back and then receives the deed back from the trustee. However, if the borrower does not pay, the trustee takes control of the property. Unlike a typical foreclosure which requires a lengthy process, the trustee has a straightforward process that allows for the swift liquidation of the property and rapid repayment to the lender.
This in mind, trust deed investment in Arizona can be a great way to get substantial returns; often somewhere between 8-18%! However, it’s not without the potential for risk. For example, if the borrower defaults, you need to have a layer of protection which helps ensure you get your cash back. The servicing agent or trustee helps provide this, but it’s also essential to have terms built into the contract which compensate you for any potential losses due to the default.
Become Familiar with the Differences Between Factional and Whole Deals
One of the biggest differences in Trust Deed Investment Arizona is how many lenders or investors are involved. In many cases, people are investing in fractional deals. That means there are lots of people pooling their money together to fund a loan. While this does typically mean the individual lenders are risking less, it also creates issues if there’s a default and the investors must all move forward as a single unit. It can add onto the timeline considerably. With whole deals, there’s a single investor funding the entire loan. There are no other people to contend with when decisions need to be made and you can deal with issues swiftly.
Work with a broker but know how to evaluate a good deal on your own.
It’s important to have an understanding of Trust Deed Investment Arizona before you get into it, simply to provide reassurance that you’ve examined the deal with your own eyes and knowledge and that everything looks good to you prior to funding the deal. However, working with a seasoned broker is also advantageous, as they can help vet deals on your behalf and see to all the details as you move through the process. That way, you can continue reinvesting your funds and earning at a rapid pace.
Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
© 2019 Level 4 Funding LLC. All Rights Reserved.
Copyright | Privacy Policy | *Terms & Conditions
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.