- Conservative Underwriting policies
- Extensive Due Diligence
- All loan terms fully disclosed to the Borrower
- Deed of Trust recorded against the subject property
- Promissory Note signed by the borrower
- Professionally prepared appraisal
- Title insurance insuring all trust deed investments
- Monthly Loan Servicing available
Interest rates range from 7% to 12%
Loan amounts range from $25,000.00 to over a million dollars. We can structure a single investor or a multi-lender loan known as a fractionalized mortgage transaction.
We can offer our investors short term or longer terms investments for those investors who are not looking to be an active investor but would rather invest on a longer term basis.
If you are a seasoned trust deed investor or looking to make your first trust deed investment we will patiently work with you in determining the type of trust deed investment, interest rate and term that best suits your needs. We are currently offering our investors first and second deeds of trusts secured by residential and commercial properties.
We personally meet with each borrower for every trust deed our company originates. We put each borrower through an extensive qualifying and underwriting process and we always comply with all required Department of Homeland Security requirements in confirming our borrowers’ identity.
Following are some of the main functions we perform for each loan submitted to our company for funding:
Appraisal of the Property
Every property that will be the security for our investor’s investment is professionally appraised and evaluated by an experienced and trained appraiser licensed by the California OREA.
In addition every property is physically visited by a staff member from our company to inspect and verify all reports prepared by the appraiser and to perform an evaluation of the neighborhood and surrounding area. A determination as to the marketability of the property is calculated to confirm repayment to our investors.
Title Insurance of the Property
Every loan our company funds on behalf of our investors are insured by an approved title insurance company. A full extended ALTA (American Land Title Association) policy is arranged for each deed of trust originated by our company. This assures that the borrower is the legal owner and that the lien position is insured. Following the closing of the loan each investor receives an original title insurance policy.
Hazard Insurance for the Property
All borrowers are required to carry a hazard insurance policy providing fire and liability insurance for the subject property. Each investor is added as an additionally insured party on each policy of hazard insurance.
All transaction are handled by either our in-house DRE licensed escrow or by an outside licensed escrow settlement company. The escrow will confirm that all documents and requirements have been satisfied prior to scheduling the closing of the transaction. After the closing all authorized loan and settlement costs and any directed payments are paid by the escrow agent. Any net proceeds due the borrower are paid by the escrow agent. Prior to closing the escrow is balanced and reviewed to verify that all expense and payment categories are correct prior to any money being disbursed.
Loan Servicing for our Investors
Our company works with a licensed, insured and bonded loan servicing company that can provide monthly loan servicing and property tax and hazard insurance monitoring.
Following the closing of the trust deed investment attention needs to be directed as to who will be monitoring the trust deed investment. There are many other actions that must be performed monthly for each trust deed investment. They are:
- Collecting the monthly mortgage payments
- Monitoring the status of the first trust deed in the case of 2nd Trust Deed
- Confirming that property taxes are paid to the county tax collector
- Confirming that adequate hazard insurance is in place and payments are being made
- Overseeing the physical condition of the property
The minimum investment that we will invest for our investors is $25,000.00. We structure individual and fractionalized trust deed investments.
All property collateral must meet the following criteria prior to our company offering any trust deed investment to our investors.
- The property must be located in California
- Maximum loan to value (LTV) is 65%
- The property must demonstrate positive cash flow after allowing for our investor’s loan. There must be at least a 1 to 1 debt coverage ratio.
- All tenant leases must have at least a 6 month history of 50% or more of the current tenants. Additional income documentation can be provided should more income be needed to comply with our company’s 1 to 1 debt coverage ratio requirement.
- All properties must be in average to good condition in order to quality as security for our investors. Should there be any deferred maintancence a fund control account can be set up to make any necessary repairs following the closing of the loan.
- Our company will not consider any property that might contain a potential environmental hazard. Should it be determined that a possible hazard might exist then our company might require the borrower to pay for a Phase 1 Environmental Report.
- There must be a least 4 months operating reserves verified in the bank following the closing of our investor’s loan.
- The owner operator must demonstrate at least 6 months experience in real estate management.
Trust Deed Interest Rate Yields
Current interest rates we offer to our investors range for 7% to 12% depending on the loan type and term. There are many different types of investment scenarios that can provide our investors various interest rate and loan term options.
We establish a data file for each of our investors that contain each investor’s investment requirements. When a trust deed investment becomes available only investments that meet the investment criteria of our investor will be presented for possible investment.
One of the principals of our company can personally consult with any investor over the phone or in person investor’s qualifications, rick tolerance, type of properties desired and yield requirements in establishing an investment plan.
We welcome any investment inquiry. Please call us at the number below and speak with one our investment counselors. We are here to help.
We look forward to assisting our investors achieve their investment goals