Who can invest in trust deeds?
Trust deed investments from GreenSpring Capital provide an attractive option to traditional asset classes such as stocks and bonds.
The trust deed investments we underwrite typically yield 8%-10% annually and produce a steady income stream of interest payments monthly. The risk may be lower than most traditional investments because these investments are backed by the protective equity of marketable, high-quality real estate.
Tightened credit standards have spurred increased interest in private equity financing by borrowers shut out of the conventional marketplace despite their strong credit credentials and larger down payment. Greater demand among property owners seeking to access their real estate equity has raised the bar for qualified properties and borrowers, making trust deed investments even more attractive.
The following entitles qualify as trust deed investors
Self directed IRA’s
Partnerships and mortgage partnerships pools
Corporations and pension plans
Our analysis can lead to a reduced appraiser value. If necessary, we may require other properties owned by a borrower be included in a loan agreement with a trust deed placed on each property – a process known as cross-collateralization – to secure sufficient collateral.
The final appraisal value of a borrower’s collateral must meet our loan parameters. GreenSpring Capital targeted an average Loan-to-Value (LTV) ratio of less than 53% with a maximum LTV ratio of 70%.
We must also have a high degree of confidence that in the event of a foreclosure, the property can be sold in a timely manner at a net price significantly above our initial investment and costs that secures (1) our investor’s capital, (2) all interest and fees owed under the terms of the loan, and (3) our estimated costs to foreclose, manage, and market the property.
Only when these requirements are met we are prepared to move forward with a loan.