Smart investors always do their research when it comes to having trust deed loans. They knew how great it is to earn passive income with little hassle. However, there is always more to learn, dive with this article to find the things you never knew about trust deed loans.
Things you never knew about Trust Deed Loans in Fort Collins, CO
1. Common sense
Private money allows for common sense decision-making. Traditional lending forces policies and requires that people fall into a certain box in order to receive funding. Staying within strict parameters can often lead to mistakes in lending. Common sense is king when it comes to trust deed loans. Traditional lending missed the boat on this one.
2. Built-in diversity
Everyone wants to diversify their portfolio. Trust deed lending has diversity built-in naturally. For example, if you have $500,000 to invest and the average loan is $80,000, you are able to have several separate investments. Each one of these loans is unique and diverse. This creates portfolio diversity without any extra effort.
3. Reliable, steady interest payments
Generally, you will receive a partial interest payment shortly after the close. Then it takes approximately 45 days for you to receive your first full interest payment. After that, payments will arrive steadily every 30 days. It is a nice reliable flow of passive income. Few investments offer such a steady stream of money with such a small amount of work.
4. Distance from the transaction
Too much distance from a transaction can be a problem. It is important that you and/or your hard money lender be deeply involved in every aspect of the transaction. Communication is key especially if there is a borrower and a co-borrower. Often the borrower has the time for an investment, and the co-borrower has the cash. You want to make sure that you have spoken to both parties so that they both understand what is taking place. There is no substitute for seeing the property first hand and speaking to the borrower directly.
5. No money down
No money down loans are advertised everywhere. The truth is, few loans are given to people without some money being put out first. Traditional and private money loans typically require the borrower to have a certain amount of cash in the deal or skin in the game. No money down is generally a myth. This is true in dealing with trust deed loans and traditional loans.
Trust deed loans are an interesting investment opportunity. It is an ever-changing atmosphere. Keeping up with the latest information will ensure that you make the smartest investments.
Contact NoCo House Buyers Inc at (970) 744-4944 and we can help to answer more questions about trust deed loans (or we can guide you to the people who can help you). Please fill in our form so we can help you quickly.