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About Trust Deed Investing

 

At the current time, bank certificates of deposit (CD) rates are at an all time low. Earning around 1% APY
The Dow Jones Industrial Average 3 month return was recently reported at -5.05% (negative)
The NASDAQ Composite 3 month average was recently at -8.44% (negative)
Our trust deed investors are typically earning 8% to 14% APY.
Cal Bay Capital investors are being shown moderately low-risk investments at high yielding returns.

​Please fill out our Investor Form and get a FREE consultation or give us a call at 415 860 4117

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Trust Deed Investing Best Practices

Trust Deed Investments checklist

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The Seven Essentials of Trust Deed Investing

At Cal Bay Capital we believe in taking a proactive approach when it comes to discussing risk. By partnering with our clients in an investment strategy based on expertise and mutual trust, we can mitigate risk and achieve our mutual goals. Trust Deeds are one of the safest high-yield investments available if you follow a few basic rules:


Do not invest in trust deeds if you need your money at a certain time. Even the best of borrowers can occasionally be slow or late with payments.
Do not invest in trust deeds if you are not willing to acquire the property for your own portfolio or cannot accept that you may have to sell in the event you acquire the property in a foreclosure.  Additionally, consider the possible expenses for upkeep and maintenance of the property if you acquire it via foreclosure.
Confirm the appropriate documents contain your vesting and percentage of ownership interest, including the deed of trust, the note, the fire insurance policy and the title policy.


The appraisal is the major factor in determining market value, but a valued service is a company that can properly review and comp the appraisal.  However, appraisals are very useful and provide a plethora of information.  An appraisal includes pictures, the size of the lot, the type of improvements, zoning, the best use of the property, age and condition of the property, and ample amounts of other useful information. It will also tell you what the appraiser thinks the property is worth based on comparable properties, the replacement value, and the income approach.


Be aware you may have to come up with revenue to keep your investment from deteriorating. For example, an REO property may require cash calls to pay expenses (e.g. property taxes) for an interim period until you can realize the outcome of your investment.


Adjust with the market! The market is still in a state of flux. With our many contacts in the field we stay ahead of the curve on these changes. The commercial property and residential home markets are being watched closely at this time.

The Seven Essential Elements of Trust Deed Investing (from the California Department of Real Estate):

  1. Knowledge, experience and integrity of the Mortgage Loan Broker through whom the transaction may be arranged.
  2. Market value and equity in the property and the security for your loan.
  3. Borrower's financial standing and credit-worthiness.
  4. Escrow process involving the funding of the loan or the purchase of the promissory note.
  5. Documents and instruments describing, evidencing, and securing the loan or purchase of the promissory note.
  6. Loan servicing provisions, authority and compensation.
  7. Recovering your investment when the borrower fails to pay.

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The California Department of Real Estate has authored "Trust Deed Investments: What You Should Know"   

(Publication RE 35):

"The purpose of this document is to provide basic information which you should know if you plan to purchase existing promissory notes or fund loans, the repayment of which is secured by deeds of trust recorded against real property.


 

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