With trade wars escalating and stocks more volatile than ever, you might be wondering if theres a safer way to invest your money. Well there is-its called a trust deed. Learn what trust deed investments are and why they’re a better bet than stocks, especially in these uncertain times.
First what is a trust deed?
A trust deed is basically a mortgage where you as an investor act like the bank. You give a loan to real-estate developer, and In exchange for your investment, the developer pays you back on a monthly basis.
This arrangement might sound sketchy but just think for a moment when you invest in a stock do you actually know what your investing in?
Because trust deeds are secured by real-estate you can make a more solid investment
Because it’s familiar you might think the stock market is a safer bet but ask yourself a few questions-
• Do you know what determines a stocks value? No, because no one can say what a stocks price will be in 5 minutes. Even if have a masters in economics, you cant definitively say what a stock is worth.
• Do you know when a stocks value is going rise or fall? No,Stock prices rise and fall based on the news of the day and the hot air spewed by analysts. One bad news story or a vague tweet could send a stocks price plummeting.
• Do you know where the stock market is actually headed? Maybe. But lately its been all over the map.
In contrast, trust deeds are based on real-estate. Real-estate has a definite value that even an eight year old can understand. Everyone knows that a 100 square foot shack is worth less than a mansion. In addition, the price of real-estate is essentially based on supply and demand and lately the price of real-estate has been climbing, as the market digs itself out of the hole of the recession.
Trust deeds are hands off way to invest in real-estate, which makes them a better bet than stocks. Unlike stocks with real-estate you can understand valuations, you can pretty much say what the price of a given property will be tomorrow, and you generally know where the market is headed.
Still if your new to the idea of trust deeds, you might be wary. Well trust deeds are actually safer than stocks for the following reasons:
3 ways trust deeds beat stocks
Higher guaranteed yield: Trust deeds are loans with interest payments, usually in the high single digits. Basically you earn a guaranteed return on your investment every month. Stocks pay out paltry dividends a few times a year and even those aren’t guaranteed
Guaranteed return on initial investment- With trust deeds your pretty much guaranteed to make back your initial investment. Think about it can you just stop paying your mortgage? No. Even if a trust deed borrower stops making payments you have a protection stocks can’t offer
Right to recourse- basically you can foreclose and liquidate the borrowers property to make your money back.
So basically trust deeds are give you rights, protections and the potential for higher returns than stocks. If your still indecisive, think about it are you going to leave the value of your investment portfolio at the mercy of the presidents next tweet? Or would you rather earn a safe and steady income from a trust deed?
I’ll leave that for you decide.
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
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About: 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 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.
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