Trust Deed Investments

A Trust Deed investment is essentially a privately funded mortgage.  The Trust Deed investor loans money to the borrower and the loan is secured by real estate property (as well as a personal guarantee from the borrower).  As the borrower makes the monthly payments on the loan, the interest earned is passed along to the investor.

In technical detail, the borrower signs a promissory Note, which is a binding agreement to pay the loan interest and principle back to the lender under the terms included in the Note.  A Deed of Trust is then recorded at the County Recorder’s office, binding the Note to the real estate property.  This legal recording provides that if the terms of the Note are not adhered to, the lender may initiate a foreclosure – forcing the borrower to bring all loan payments current, or loose the property.

When a Trust Deed is recorded, it is placed in a lien position.  Trust Deed investments can be in the 1st position, 2nd position, or even 3rd and lower.  The lien position is important, because the 1st position takes priority over the 2nd position – the 2nd over the 3rd, and so on.  In any case of recovering monies on the property, the highest priority position will be settled and paid before any lower priority positions receive any funds.

AFI funds only 1st position Trust Deeds.

Trust Deed investments are secured by the real estate property itself, and thus, the market value of the property. AFI loans up to a maximum of 65% of the property's appraised value. AFI funds only short term notes, primarily 12 months in length, with interest only payments each month, and a baloon payment due at the end of the term. AFI investments provide a minimum of 35% protective equity, and only one year of exposure to real estate market conditions. In order to loose a significant portion of the security of the investment, there would have to be a drastic decline in property values, within a very short period of time.

Trust Deed investments can be made by individuals as well as other entities, such as; IRA accounts, Trusts, Pension Plans, Partnerships and Corporations, etc.

Advantages of Trust Deeds

Trust Deeds offer the following advantages as investments:
Pays out interest monthly.
Interest rates paid are generally much higher than bank rates.
Notes are semi-liquid and can be sold or traded.
Investors can borrow against the note, using it as security.
Security of trust deed generally increases with time as the property appreciates, providing an even lower LTV.

Loans made by Alliance Financial Inc. typically have investor interest rates of 10-13%.

Call us today at 1-866 603-5999. We can also send you investment information to your door, simply complete our Investment Information Request Form.

For a list of currently available Trust Deed investments, please click here.