I was wondering if anyone here has experience investing in 1st trust deeds (TDs).
Basically, here's how it works:
1. A broker collects money from a pool of investors.
2. This broker lends out the money to a borrower. Typically, the terms are:
a. High interest
b. Short-term
c. Interest only, with a balloon payment due at the end of the term.
3. During this time, the investors collect interest payments, and then they get their principal back.
4. The broker makes his money by:
a. Origination fee
b. Taking a % of the interest for himself.
The particular broker I am looking at only lends to 1-4 unit properties.
Just wanted to get some info on this...
TIA!
Basically, here's how it works:
1. A broker collects money from a pool of investors.
2. This broker lends out the money to a borrower. Typically, the terms are:
a. High interest
b. Short-term
c. Interest only, with a balloon payment due at the end of the term.
3. During this time, the investors collect interest payments, and then they get their principal back.
4. The broker makes his money by:
a. Origination fee
b. Taking a % of the interest for himself.
The particular broker I am looking at only lends to 1-4 unit properties.
Just wanted to get some info on this...
TIA!