TRUST DEED INVESTING
Trust Deed investing by private individuals, retirement plans and other lenders has been available for many years. In the 1970's, private real estate lending grew from a cottage industry practiced by a few real estate sales people to a business unto itself when realtors were made exempt from California's usury laws to the extent they arranged loans secured by real property.
Since the 1970's, in all the ups and downs of the real estate economy, private real estate loans either arranged or financed by licensed California real estate brokers have become a billion dollar plus industry. By having a real estate broker arrange the financing, private lenders can receive interest on their money in excess of the California usury limits. Brokers usually arrange the loan with the borrower and are paid a commission for doing so, and many brokers offer to service the loan, collect payments, and also receive a fee for doing so.
Brokers can also "fractionalize loans" where an investor can take a portion of the loan with other investors all holding their proportionate undivided share in a loan as tenants in common. BSF has a California Department of Corporations "Business Plan" permit which permits BSF to exceed the 10 lender limit on fractionalized notes.
Many people utilize private real estate loans as a way to increase the yield on their investment dollars while being secured by tangible property. A private lender receives a Note, the evidence of debt, and a deed of trust, the security for the debt for their lent dollars. In addition, title insurance, casualty insurance, and tax service are typically obtained.
BSF allows private lenders to participate directly in individual trust deed investments, either by
investing in a whole loan or by purchasing fractional interests and becoming the lender on a loan. Private lenders must be California
residents and meet certain income and net worth requirements in order to participate.
>> More (Individual Loan Opportunities)
In either case, private lenders benefit from having BSF's experienced management underwrite the loan investments. BSF gathers important data from the borrower, such as financial statements, appraisals, tax returns, credit reports, title reports and similar information necessary to evaluate a borrower on a loan investment. BSF also visits the property to be used as collateral for the loan. Once there is a determination that a loan is a suitable investment, BSF makes the loan with the Fund or private lenders are sent a Loan Summary, together with an Offering Circular, that details the nature of the transaction. If interested, the private lender can contact BSF to learn more details about the loan, review the loan file or even visit the property prior to committing to any investment.
Once the loan is made, BSF does all the loan documentation and lender documentation, opens escrow and instructs escrow to follow standard practices to record the loan. Once recorded, BSF collects the loan payments and disburses the payments to the private lender according to their proportional interests. If any delinquency issues arise, BSF begins collection efforts on the payments and, if necessary, takes foreclosure action or other actions to protect the private lenders interest.
Private lending whether by investing in the Fund or individual equity loans can increase a private lenders income and at the same time they have real property standing behind their loan.
Please take time to peruse the current loan opportunities available or review our recently funded
loans to learn more about private lending . A BSF agent is also available for more information regarding private
investments by either phone or e-mail or sign up to receive by e-mail our loan summaries as they are released.
>> More (Recent Loan Summaries)
>> More (Agents and Resumes)
>> More (Contact Us)