(If you are like most people, you want your hard money loans funded as soon as possible and outside of that you don’t have too many questions about where your hard money is coming from. Sure, you are working with hard money lenders; California investors, however, is where your financing is more than likely coming from.)
To get a better idea of trust deed investing, you must first look at your hard money lenders. California investors often invest in hard money loans for their own lucrative reasons. But, nevertheless, most lenders of hard money are individuals or private companies. The key word there, however, is most lenders i.e., not all. So, how do you know if you hard money financing is coming from a trust deed investor? Well, the simple answer to this question is you may not.
The reason you may not know if your financing is coming from trust deed investors is because California law requires that a trust deed investor must be in compliance with usury laws. Thus, the easiest way for this particular kind of investor to do this is by working with a broker. Consequently, you may not deal with your specific investor directly.
With that being said, your trust deed investor, in essence, is the bank. You are the borrower and your potential business venture has the best chance of getting financing via hard money lenders. California investors, in the end, make it all possible. So, now that you know a little more about trust deed investors, you may be wondering just what makes these particular investors different from your regular investors? Ultimately, there are not tons of differences. Nevertheless, it still helps to know those differences.
The major difference between regular real estate investors and trust deed investors is really the amount of risk that he or she assumes. As you probably know by now, trust deed investing offers a little more security when it comes to the promises of you, the borrower. This means, if you the borrower do not honor your terms or commitments, a trust deed investor can recoup the majority of their losses. A real estate investor, on the other hand, does not have this additional safety net if you will. This is why you will often see that private real estate investors are more eager to help or rather are more accommodating because your success is ultimately their success. Of course, this is not to say that one type of investor is better than the other type. Remember, you have to choose the right lender for you. Thus, this could be a close family friend or it could be a private lender that works with a trust deed investor.
If you are not sure about what kind of investor or lender suits your specific business venture that is okay. You can easily solve this problem by asking around and doing a little research. In the end, there are dozens of reputable hard money lenders in California and even more investors—you just have to know where to look.
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.