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By James Blacker, Benzinga
For investors seeking a more secure and reliable alternative to real estate syndication, trust deeds may potentially offer a flexible and low-risk investment with the promise of high returns, but without the hassle of property management.
A trust deed is an agreement between a borrower and a lender to have a private loan secured by real estate. Trust deed investors act as the bank, earning passive income through interest rate payments. This type of investment is facilitated by a mortgage broker and loan servicing agent, such as Ignite Funding.
Benefits Of Trust Deed Investing Over Syndication
Trust deeds are an often-overlooked investment opportunity, despite the many advantages they have over real estate syndicates. One of the key benefits is the higher level of security they offer. While syndication involves pooling funds to purchase and collectively manage properties, trust deed investors hold a secured interest in a specific property, which limits risk as they have the right to foreclose if the borrower defaults on the loan. Furthermore, in the case of “first” trust deeds, the deed holder is the first to get paid back in the event of a default, giving investors an added layer of security.
There is also a greater degree of transparency when opting for trust deed investments over syndications, as investors are able to conduct thorough due diligence on the underlying property. This transparency, along with fixed interest rates and regular monthly payments, helps ensure a stable and reliable income stream, making it an attractive option for anyone looking to diversify their investment portfolio.
Trust deed investors also have more control, as they can choose specific properties to invest in and therefore tailor their own real estate investment strategy. They also have more flexibility as they can choose the loan and terms that suit their objectives. This type of control and adaptability is not something you typically get with syndication.
Additionally, by earning interest on the loan amount, trust deeds often yield higher returns, and can potentially be more profitable than traditional syndications and other passive investments.
How To Maximize Returns With Trust Deeds
To optimize returns, it is important to choose a reputable mortgage broker with a strong track record. Partnering with a reliable company such as Ignite Funding can boost your chances of reaping a high return on investment. They can help you carry out due diligence on both the property and borrower, which is a crucial step in trust deed investment.
Prudent investors will also diversify their investments across multiple properties or loan types in order to mitigate risk. This can help protect their investments against market fluctuations and balance potential returns with effective risk management.
If you're looking for an investment that combines security, transparency and flexibility with the potential for strong returns, trust deeds are an option worth exploring and may offer a compelling alternative to real estate syndications.
Find out more about trust deed investing by visiting the Ignite Funding website or text the word "Benzinga" to 702-919-4281 for additional information.
Ignite Funding, LLC | 6700 Via Austi Parkway, Suite 300, Las Vegas, NV 89119 | P 702.739.9053 | T 702.919.4281 | F 702.922.6700 | NVMBL #311 | AZ CMB-0932150 | | Money invested through a mortgage broker is not guaranteed to earn any interest and is not insured. Prior to investing, investors must be provided applicable disclosure documents.
Featured photo by Oleksandr Pidvalnyi from Pixabay.
Benzinga is a leading financial media and data provider, known for delivering accurate, timely, and actionable financial information to empower investors and traders.
This post contains sponsored content. This content is for informational purposes only and not intended to be investing advice.
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