Trust Deeds: The Investment You May Be Missing

As an investor, having many different investment opportunities at your fingertips is both a blessing and a curse. It means more opportunities to make money but can make choosing which one to pursue tedious and difficult. With the stock market so often erratic and unpredictable, now more than ever people are looking for other ways to intelligently invest their money and diversify their investment portfolio. Real estate is one of those investment vehicles that investors are turning to for those high returns. You may be thinking to yourself that real estate is not a realistic investment for you. Rental properties and fix-and-flips are time intensive and require a hefty amount of available cash, and many real estate “crowdfunders” have high minimums and financial requirements you have to meet to invest with them. If this is you, then you may want to consider investing in Trust Deeds. Investing in Trust Deeds with a company like Ignite Funding can help you break down those barriers to real estate investing, and help you earn the returns you deserve.

What is Trust Deed Investing?

Investing in Trust Deeds essentially means you are loaning your money against real collateral. The collateral is real estate, in this case, which serves to protect the lender’s investment. This leads us to one of the most important considerations in Trust Deed investing: the true value of the collateral. It’s very important that Trust Deed investors consider the size of the loan they are making in relationship to the real estate collateralize the loan. This is one reason why Ignite Funding uses a detailed underwriting process to help justify the value of the property, evaluate each piece of collateral at hand and ensure the borrower is accountable for what they are borrowing.

Who is Ignite Funding?

Founded in 1995, Ignite Funding has evolved with the changing real estate landscape. Our original business model began as a traditional home mortgage lender providing lending to home buyers. The demand for lending from home-builders and developers reshaped our business in 2011. Since that time, Ignite Funding has funded over half a billion dollars in loans with investor capital.

Ignite Funding is well respected throughout the western United States as a reliable resource for lending. When banks are not lending, Ignite Funding is. We pride ourselves in working with a handful of borrowers with a proven track record. We follow a strict underwriting process when evaluating our loans before they are presented to our investors on a matrix that includes, but is not limited to; location, market conditions, various valuation methodologies, borrower track record and financial condition, and exit strategy. These projects can include the acquisition of land, development, construction of residential and commercial properties, and the refinancing of the aforementioned.

At Ignite Funding, we work as a team to ensure you experience the same level of professionalism throughout the entire process. We do not believe in outsourcing. The loan underwriting and origination, capital fundraising, loan servicing, investor relations, tax reporting and statements, foreclosure process (if required), property management and sale of property are all conducted by us. You will never be passed on to someone else.

Do I Qualify to Be an Investor?

You do not have to be an accredited investor to invest with Ignite Funding. Ignite Funding is licensed with the Mortgage Lending Division of Nevada, which requires investors to meet the following suitability requirements; the investor’s household net worth is more than $250,000, excluding their primary residence; and/or their household net annual income was more than $70,000 for the previous two years with the expectation they will continue to earn that income.

How Are the Projects Funded?

Companies like ours (Ignite Funding) use a type of “crowdfunding” method to aggregate capital from multiple smaller investors and pool the investor’s capital to directly fund real estate projects. This allows Ignite Funding to implement a minimum of $10,000 to invest on a single loan. The loans are also short term, ranging from 6 to 18 months in duration. During that time, you are earning a monthly fixed income of 10% to 12% annualized interest.

What’s the Risk?

Depending on which company you invest with and the structure of the investment, the risk you take on as an investor can be crucial to your capital investment. For example, if the borrower defaults on the loan, the servicer could pass the loss directly to you as an investor. At Ignite Funding, that is NOT the case. Ignite Funding will work on the behalf of the investor with the borrower to resolve any default issues that may occur. In some cases, a foreclosure may be the best option in order to help mitigate the loss of capital to investors. To learn more about how Ignite Funding handles default situations, click here.

I’m Ready to Invest, How Do I Become an Investor?

The first step to make real estate investing a reality is by contacting one of our Investment Representatives. Our expert staff will fill you in on our investment options, the type of projects our borrowers need financing for, on our rigorous underwriting standards, and how we mitigate risk. Our Investment Representatives can be contacted via phone, email or in person at our office.

The next step is to fill out an application online to create your free account. Without an account to facilitate transactions and paperwork, you cannot make any investments. After your account application is submitted, our Loan Processing Department will ensure all required paperwork is completed. Lastly, you will be provided with the information necessary to make a confident decision about which one of our many available investment projects best suits you.

Now that you have decided which project to invest in, you’re probably thinking, “When will I start to see a return on my investment and how often will I receive payments?” You start accruing interest on your investment the day the loan is funded. Interest payments are paid in the arrears and disbursed directly to you on the 15^th of each month. Once the loan is paid off, your capital is returned to you. It’s common to see an annual double digit return on your investment.

For investors who want control over their own real estate portfolio, Trust Deeds are a great option. Investors can browse and pick individual opportunities based on location (including across state lines), project type, risk and return profiles. They can manage and track investments through an online client portal on the Ignite Funding website, automate incoming or monthly income and access investment financial records.

For more information about Trust Deed investments or if you wish to schedule a FREE consultation with an Investment Representative, please click here.

Members of the editorial and news staff of the Las Vegas Review-Journal were not involved in the creation of this content.