Retirees Find Trust Deeds a Good Investment


Good Return on Trust Deed Loans

Trust deed investments have been growing in popularity among retirees, and most rapidly in the markets that saw the fastest recovery after the 2008 meltdown. Particularly in one’s own real estate market, where one is comfortable with values in general, a trust deed investor can easily spot a real estate transaction that makes sense to lend on. And rather than owning the real estate themselves, trust deed lenders can instead make a loan on real estate and earn a handsome return.


Trust Deed Loans Provide Regular Income

Retirees who count on regular income, particularly those located in California, Arizona, and Nevada, have flocked into trust deed investing in recent years for reliable monthly payments. The tremendous growth in private money lending has also been indirectly fueled by bank qualification standards, which have remained stubbornly high in the post recession lending environment.

Borrowers who cannot qualify for bank loans are seeking out private money loans from trust deed investors. Private money loans aren’t just for the desperate, or those with bad credit scores. These loans, also called hard money loans, fill a multitude of purposes and are a vital current of credit in the economy. Private money loans are assisting real estate investors to transform vacant, run-down buildings into gorgeous real estate that generates revenue. These loans are also being used to finance inventory purchases for business owners, while others may be used purely for their speed of funding. With so many uses for these non-bank loans, it’s no wonder that trust deed investing has grown so rapidly in recent years.

Call us today at California Private Money Lenders at 707-315-1119 so we can answer your questions about trust deed loan investments or fill out our contact form and one of our trained private money lending specialists will be in touch soon.

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What Questions to Expect from Hard Money Lenders

Getting Your Loan Information Gathered

Hard money lenders ask different questions from traditional lenders. You can’t approach one simply expecting that a high credit score will be enough to get a loan. Instead, they look at you, your proposed purchase, and your equity to answer one basic question: Are you motivated to repay the loan? To this end, here are five of the most common questions that you can expect to be asked:


Hard Money Lender Question #1: How much can you put down?

Traditional lenders make loans with low down payments since they know that is what borrowers want. Hard money lenders, on the other hand, are looking for you to truly invest with them and will expect higher down payments.


Hard Money Lender Question #2: What’s the asset worth?

Right in line with your down payment, private lenders look at the underlying value of the asset. If you can show that the asset you’re buying is worth significantly more than what you are borrowing, it is a good candidate for hard money. Some hard money lenders will even look at the building’s post-improvement value instead of its value as it stands when you apply for the loan.


Hard Money Lender Question #3: What really happened with your credit?

In the private lending world, credit decisions aren’t made on the basis of a credit score. It’s completely possible to get declined for a hard money loan with a high credit score while someone else with borderline credit gets one. As such, be ready to discuss your credit history with the understanding that a private lender can look at what you’ve done in the context of what you will do moving forward instead of being exclusively focused on the past.


Hard Money Lender Question #4: What’s your exit strategy?

Typically, hard money lenders structure their debt for the short- to middle-term. As such, they will want to know what your plan is to replace their financing by either selling the asset or having it taken out with a more permanent loan.

Hard Money Lender Question #5: Do you need to close in a few weeks… or a few days?

Hard money lenders don’t just make debt available on properties that banks won’t touch. They also are able to make lending decisions at a pace that leaves the rest of the real estate lending community behind. Typical loans close in under a month while it’s entirely possible to get a loan closed in a matter of days if all of the pieces line up smoothly.

Call us today at California Private Money Lenders to see if a private money loan with be the answer to your real estate loan challenge 707-315-1119 or fill our our borrower form or contact form and one of our private money loan specialists will be in touch promptly.

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