Chapter 13 - Pitfalls for Investors to Watch For

Although a trust deed investment is one of the safer investments you can make, it is imperative that you understand there are still risks involved. The best way to ensure that you avoid pitfalls is to learn as much as you can about trust deed investing and everything it involves. However, to give you an idea of some of the pitfalls you should watch out for, the following are a few tips:

It is always in your best interest to physically inspect any real estate you are intending to invest in, even if the property has already been checked out by the appraiser, broker or title company.

Take the time to establish your personal opinion regarding the value of the real estate collateral. You can do this by using a number of approaches such as:
? Ask your realtor for information on closed sales of comparable properties
? If you were to purchase the property today, what would it be worth to you?
? Read the appraisal

Take the time to learn the difference between personal and real property. You dont want to confuse personal property for real property when you are establishing your opinion in regards to value. Real property is that which is considered to be affixed to the earth. However, dont mistake all property that is fastened to the ground to be real property; some of these items are personal.

You should make it a point to know how the borrower is planning to pay the private money loan. Just because short term loans are primarily funded based on real estate equity, you should discover what the borrower has already pre-approved for their take out loan.

When it comes to Loan to Value Ratio that concerns homes occupied by owners, you should never lend out a LTV that exceeds 60%, even if the home appears to be the most ideal of owner occupied homes. Likewise, as far as non-owner occupied homes are concerned, the LTV should not exceed 50%

You should never rely on future promises regarding improvements unless the proper draws for the upcoming work that is to be completed is officially set up.

Make sure you do not want or require any final, additional documentation before you close. Such documentation can include, but is not limited to following:
? Certificate of occupancy
? Well report
? Proof of purchase cost
? Notice of completion
? Closing statements
? Roof reports
? Toxic reports
? Sign off of final permit card
? Etc.


Take the time to research everything you can about trust deed investments. Speak to qualified professionals, and dont be afraid to ask questions, or rethink your decisions before making an investment. By following these guidelines, you will lower the risk you take when making a trust deed investment, and will be less likely to experience a pitfall.

California First Trust Deeds

They can also inform all senior lien holders about their lien, and ask them for written notification before they foreclose.

_ The owner of a trust deed is generally first or second in regards to the lien position. The instructions provided by escrow determine the conditions that need to be met or waived before the escrow officer can take action and disburse your money to either the note holder or the borrower. In addition, the note should provide the investor with the choice of needing the payoff, so that they can protect their principal from foreclosing on the tax lien. Through reviewing and maintaining plans, as well as specifications that are relevant to jobs. Before a loan is granted, a Coppercrest Funding officer will perform a personal inspection of all subject properties. A closing statement will be sent to you, which describes how and to whom the documents and funds were distributed.

Endorsements are very similar to the riders found in a variety of other types of insurance, and they provide coverage for precise issues that are not covered in the pre-printed title insurance policy.
All that appears is what is displayed within the policy. Furthermore, deeds of trust are safe investments because borrowers are generally a good risk to take. The best way to ensure that you avoid pitfalls is to learn as much as you can about trust deed investing and everything it involves. In other words, the loan amount is exceeded by the real property value.

Should there be problems during the foreclosure, or should necessary negotiations need to take place during the process, in-house legal counsel is waiting to offer assistance to the investor.
5% compounded annually. A non-judicial foreclosure can be handled by just about any title company or an independent foreclosure company that has a good reputation. Chapter 4 - Typical Borrowers There are a number of reasons why borrowers require private money loans. After 20 years, the 0. The loans provided by Coppercrest Funding are first secured with deeds of trust on real estate, and in addition are supported with the borrowers personal guarantee.