Trust Deed Investment: A Guide to Building Wealth with Real Estate

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Real estate has often been lauded as one of the best vehicles for building wealth. Andrew Carnegie, one of the richest men in history, famously said that “ninety percent of all millionaires become so through owning real estate,” and there is evidence to support this claim. 

Studies have shown that real estate outperforms stocks, bonds, and other investments over the long term. In addition, real estate provides a number of unique benefits that other investments cannot match. For example, real estate can be used as collateral for loans, providing a source of funding for other investments. Additionally, real estate can generate passive income through rent payments, providing a steady stream of revenue without the need for active management. 

And one of the most popular ways used by experienced investors for building wealth with real estate is trust deed investment. So, let’s go through the main concept of the trust deed investment approach and learn how to make money with it!

What is trust deed investing?

Trust deed investing is a type of real estate investment in which an investor funds loans that are secured by property. Trust deed investments are typically short-term loans, with maturities of five years or less, that are made to professional real estate investors. 

The loans are typically used to finance the purchase or rehabilitation of investment properties. Trust deed investing can be a relatively safe and profitable way to invest in real estate, as the loan is secured by the property itself. 

In addition, trust deed investments typically offer high interest rates, which can provide investors with a healthy return on their investment. However, it is important to note that trust deed investing is not without risk, as the underlying property can lose value and the borrower may default on the loan. So, it is important to do research before making any trust deed investment.

How to invest in trust deeds

When it comes to investing in trust deeds, there are four main options:

1. Sourcing loans and lending money directly to real estate investors. 

It can be time-consuming, but it allows the investor to have more control over the loan terms.

2. Purchasing loans from brokers. 

It requires less work, but it typically comes with higher fees.

3. Investing in a fund that invests in trust deeds. 

It can provide diversification and professional management, but they also come with higher fees. 

4. Identify people who are directly investing in trust deeds as a group and invest along with them.

This way can lead to lower fees and the potential for higher returns, but it requires more research to find a good group.  

Before deciding whether to invest in trust deeds, it’s important to consider your goals and preferences. Are you looking for a steady stream of income? Or are you willing to take on more risk for the chance of higher returns? Once you’ve answered these questions, you’ll be in a better position to decide whether trust deed investing is right for you.

How do you figure profit on a trust deed investment?

When figuring profit on a trust deed investment, there are a few things to keep in mind:

  • The interest rate on the loan will affect your return. 
  • The length of the loan term will also affect your return. 
  • The amount of money you put into the deal will also impact your potential profits. 

Generally speaking, the higher the interest rate and the longer the loan term, the higher your potential profits will be.

In 2022 investors can expect to earn between 6-9% on their investment. Of course, the exact rate of return will depend on the particular strategy and risk profile of the fund. For those who are willing to take on a bit more risk, professional first trust deed investors can offer borrowers an annual interest rate of 7-9%. And while these loans typically have a shorter term, they also offer a higher loan-to-cost ratio (75-80%). 

How to make a guaranteed 8% return on investments 

What if you could steadily make a guaranteed return on your investments without any hassle and stress? 

LBC Capital has just launched a new Investment Portal providing trust deed investment opportunities to accredited investors who can invest a minimum sum of $100,000. 

The Fund has a target return of 8% and offers a stable and safe investment opportunity. 

Why join the portal? LBC Capital is a leader among trust deed investment companies founded by a successful investor, Boris Dorfman. 

With current and short-term uncertainty in pretty much every market, it’s more important than ever to invest in a fund that can provide stability and returns. That’s where we enter – our return is stable, our risks are low, and our fund family is one of the best in the business.” Boris Dorfman

LBC Capital has a team of experienced professionals with a track record of investments in the real estate industry. Its investment portal was developed to provide its investors with high-quality investment opportunities that offer both stability and potential for capital appreciation.

Start growing your income with Investment Portal! 

Become an investor

FAQs

How do trust deeds investments work? 

When you invest in a trust deed, you are essentially loaning money to a borrower who is using real estate as collateral. If the borrower defaults on the loan, you have the right to foreclose on the property and recoup your investment. Trust deed investing can be an attractive option because it offers the potential for high returns and low risk.  

What are the benefits of trust deed investing? 

Trust deed investing offers several potential benefits, including high returns, low risk, and tax advantages. Additionally, since trust deeds are secured by real estate, they tend to be more stable than other types of investments, such as stocks or bonds. And since they are typically short-term loans, they offer flexibility that other investments may not provide. For example, if you need to access cash quickly, you can simply sell your interest in a trust deed rather than waiting for it to mature like you would with other investments.

Is trust deed investing right for me? 

Trust deed investing may be right for you if you’re looking for an investment with high potential returns and low risk. However, it’s important to remember that all investments come with some degree of risk and you should never invest more than you can afford. If you’re not sure whether Trust Deed Investing is right for you, we suggest speaking with LBC Capital financial advisor to get professional guidance before making any decisions about investing your money.

Sum Up

While it’s true that you don’t want all of your eggs in one basket, trust deed investments can provide a level of stability and security that other asset classes simply can’t match. After all, when was the last time you heard about someone losing money on their investment in land? So while you definitely want to diversify your portfolio, trust deed investments should be part of your overall asset allocation strategy. With their low correlation to other asset classes and their potential for high returns, they offer the perfect balance of risk and reward.

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