Re: 1st Trust Deed Investing?
Higher yields because of increased risk.
These loans are not made on the creditworthiness of the borrower, but on the value of the real estate. Therefore, you need to be sure you really have your arms around the loan to value ratio. It shouldn't be more than 50 to maybe a high of 65%. So who is doing the due diligence? The broker? What is the broker's history?
This is a security so the offering to investers should be accompanied by lots of disclosures and the investers will likely need to be "qualified" as in assets of over a million dollars.
I have left my real estate investing to direct ownership or through LLCs and limited partnerships. I have stayed away from trust deed/mortage financing through brokers because I never felt enough in control to do the necessary diligence.
No more lawyer stuff, no more political stuff, so no more CYA