The Most Important Tips for Safer Trust Deep Investment

If you are trust deed investor, which action that can you do to protect your funds? Dun worry, if you don’t know then read and focus on the tip below :

1. Never make any loan extensions, extra advances, modifications or other changes of any kind to an existing real estate loan without 1st getting written approval from other minor lien holders of can lose your investment and be sued for this although you were unaware that such a lien holder existed.

2. Go down and take a look at that property yourself even if other parties – like the broker, appraiser and title company – have already looked at it. After all, it is your cash that you are loaning to fund it.

3. Did you use as several approaches to value as possible to rate the building? There are various ways in which of gauging the properties’ market value and you’ll want to use a range to determine that you are making a wise investment. Here are some indicators of value that you might want to use:

  • read the appraisal
  • ask your real estate agent for information on closed sales of comparable properties
  • check the tax assessor’s opinion of value on the pre-lim.
  • consider the property’s worth to you if you were to buy it today.

4. Do you know how the borrower plans to repay the loan? You’ll find yourself in trouble if you have not inquired. Other than that, federal and consumer protection laws insist that you inquire otherwise you’ll find yourself sued and your client may label himself from the transaction.

5. Did you only use “existing” improvements to determine the properties current value? You’ll be mistakenly together with promised or hypothetical improvements into your calculations. Many beginning investors fall into the trap of arranging loans based on promises of future improvements (that either never occur or go miserably off-path). We hope you do not fall into the trap.

6. Did you need the purchase and pre-payment of twelve months fire insurance premium paid in full? Have you ever done this escrow? Caution: Coverage can be cancelled if you permit the borrower to write down a check for it outside escrow and her check bounces!

7. Has the corporation’s owner also signed personally for the loan on a private guarantor form? The borrower’s motivation to walk away without repaying you may be hindered if his own name is taggedwith that of the corporation. It also straightaway separates the borrowers you want from those you don’t.


Finally, always but always, run intensive checks on property value and on background and worthiness of those you plan to loan to. Will they repay you? If so how? Is property worthwhile? Can it repay your proceeds? Running these checks will involve time, but will never hurt… you will end with a safer trust deed investing experience.


Source : ezinearticles

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