California private hard money is currently all the rage and realistically it should be . The truth is that private hard money financing has made a name for itself amongst the big banks and traditional institutions.
California private hard money can be characterized as a helping hand because, despite the larger down payment requirements and the higher interest, this particular kind of financing is all about making the underdogs’ dreams come true. Of course, in this case, the underdog is more than likely a trust deed investor. But, nevertheless, as movie-esque as this all sounds, it is the truth. California private hard money has partnered itself with trust deed investing and the real estate market is much better for it.
If you are new to the wonderful world of trust deed investing, the good news is you are not the only one. As of recent, many investors have realized that they are able to invest in a variety of loans that are secured by real estate or commercial investment property. This means that foreclosures are being bought and flip ( if necessary) at a record rate. Ultimately, this is great news for people that are looking to invest or own a home or office building.
With that being said, the issue with traditional or conventional banks is, of course, a story as old as time. Banks are afraid of the risks that are associated with foreclosure and property that is not turn-key at the time of funding. In response to their fear, private hard money and trust deed investing were born. Moreover, since this particular kind of investing and financing is so attractive, it is more than evident that it is not going away anytime soon.
Trust deed investing is so lucrative or attractive to investors because if done right, the investor usually ends up with a nice annual return. Furthermore, the common risks and fears that keep the traditional institutions at bay do not really apply when it comes to trust deed investing. Due to one of trust deed investing’s top benefits, there is little risk associated with taking a loss and you can thank the built-in margin of safety (as it is often called). The built-in margin of safety, in essence, is the difference between the amount of the loan and the value of the property.
Ultimately, at its core, this particular type of investing is better for the investors if you are comparing the benefits of standard, private hard money. It is better because the built-in margin of safety is really a clause. In other words, if the borrower fails to perform, the investor/lender can foreclose on the property or office building almost instantly if they so choose. This means that the investor/lender will essentially recoup their investment and most likely including any past due interest or penalties. Of course, it is still important to note that this particular kind of investing is not without some risk rather that most of the time the investor or lender makes out better in the deal if things do go south.
Dennis Dahlberg Broker/RI/CEO/MLO
Level 4 Funding LLC
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true.
Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.