Basics of Investing

Archive for December, 2006

Question: Iam interested in Trust Deed Investments, is the risk to high in the California.?

Answer: The risk is not too high in California. But you have to be smart and careful. Follow some simple rules.

1) Personally visit every property you make a trust deed loan on.
2) Lend only on properties you do not mind owning- think “can I rent this out?”
3) Do not lend more than a 1 hour drive from your home.
4) Get a title policy delivered directly to you from the title company, and write closing instructions to the title officer yourself.
5) develope a good relationship with a TD broker, and dont cave in to sales pressure.

other rules of thumb:
1) 60-65% loan to value is a formula that has worked in this business for 40 years.
2) Document the borrowers ability to make the payment and still buy gas and groceries etc.
3) start reading about the laws governing trust deeds.
4) read the California Department of Real Estate publication titled “What a Trust Deed Investor Should Know” or something like that.

Sincerely,
Marshall Murphy
TDMarket.com

7. California Trust Deed Investing: Hard Money Loan Examples