We pride ourselves on the personal attention and services we provide to our investors, which services include collecting and distributing monthly payments. Most notably, when you invest with Fidelity, you can rest assured that we will never sell your investment on a secondary market, which means you can expect the same high level of service from us for the entire life of your loan.
Fidelity is considered by many to be one of the founders of our specific form of trust deed lending. Go ahead…ask around about us. To find out more about investing with Fidelity, please give us call at or email us at info fidelityca.
Pay people well, treat them well, and you can measure their satisfaction by how long they work there. By many measures, the Fidelity Way has been a success. Long-term and skilled employees provide our investors with in-house escrow, complete documentation and professional loan servicing.
We collect payments and distribute monthly checks to our investors until the loans are paid in full. Fidelity is not structured to sell loans into the secondary market. Our investors include financial managers, pension funds, professional corporations, family trusts, high net worth individuals, as well as many smaller investors seeking to balance and diversify their investment portfolios.
Whereas, a mortgage is between two parties — the borrower and the lender. The second primary difference between a trust deed and a mortgage is what happens if the borrower defaults on the loan. In contrast, if a borrower defaults on a trust deed loan, the trustee can pursue a non-judicial foreclosure process that is typically quicker and less costly, as discussed further below.
With a deed of trust, the trustee who holds onto the property title will be in charge of pursuing the final foreclosure process if the loan goes into default. One of the main reasons that banks choose to invest in mortgages as opposed to trust deeds is that mortgages are typically long-term, investments that are paid out over years at a low, but stable, interest rate.
On the other hand, trust deed investments are typically short-term investments that typically mature in 5 years or less, but pay a higher interest rate. Advantages of Trust Deed Investing There are many advantages to trust deed investing that makes it an attractive investment vehicle for sophisticated high-net-worth individuals seeking to diversify their portfolios.
One key advantage is that your investment is typically made at a significant discount to the actual value of the property. That fact provides a safety cushion to account for market corrections or other expenses that may be incurred in the event of a default. Another key advantage to trust deed investing is that your investment is secured by tangible property that you can take title to in the event the borrower defaults on its loan obligations. A non-judicial foreclosure provides the lender with the ability to bypass the court system and instead use the terms of the trust deed as well as State law.
In California, the non-judicial foreclosure process begins when the lender records and provides the borrower with a Notice of Default, which gives the borrower no less than 90 days to correct if possible. Because this process is typically quicker and easier than any type of judicial redress, it minimizes some of the risks that come with making a trust deed investment.
Yet another advantage of trust deed investing is that it typically provides an appealing yield with low risk relative to the returns. Because trust deed investments are generally shorter in duration and extended to borrowers who may not satisfy bank lending criteria, you should be able to earn annual returns in the high single digits to low double digits, depending on the characteristics of the loan and the assessed risk.
These returns are typically paid to you at a monthly fixed rate with the principal investment amount paid in full when the loan matures. Instead, if the loan performs as expected, you can relax while bringing in income from the payments that are made by the borrower each month. Disadvantages of Trust Deed Investing While trust deed investing can provide you with attractive risk-adjusted returns, there are some disadvantages that you should know about before you invest your money into a trust deed.
You will be paid a stated interest rate only. In addition, all documentation, which can be lengthy and complicated, must be properly perfected.
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The trust deed investor is able to analyze each specific investment opportunity in regard to its real estate collateral and yield. While NCF will always be available to provide the investor guidance and counseling on the trust deed investments, the ultimate decision is in the hands of the trust deed investor rather than a manager of a fund who might have conflicting interests in the investment decisions.
Once the investment is made, the loan will be serviced though our Bureau of Real Estate regulated trust account and the investor will receive monthly payments. The investments will be handled by professionals who have over 40 years of experience brokering and servicing trust deed loans in California.
Whether you are new to trust deed investments or a seasoned investor, we welcome the opportunity to discuss our trust deed program with you. Please feel free to contact us at any time. Trust deed investors who have not previously worked with North Coast Financial are encouraged to download and complete the one-page questionnaire: Please download and then save as a PDF file. 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 high-end home markets are being watched closely at this time. Having provided all the pitfalls and negatives, you should not lose your money in trust deeds. You may end up owning the property. Ensure the paperwork is in your name. Understand how value is determined. Be aware of the occasional requirement for the temporary investment of additional funds.
Adjust with the market. Market value and equity in the property and the security for your loan. Borrower's financial standing and credit-worthiness. Escrow process involving the funding of the loan or the purchase of the promissory note. Documents and instruments describing, evidencing, and securing the loan or purchase of the promissory note.
Loan servicing provisions, authority and compensation. Recovering your investment if the borrower fails to pay.
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Contact us. We Can Help. Many investors also look to the broker to perform some portion of the due diligence on a given loan. We get the Deal done right. Set up an appointment today. Investors like sourcing investment through brokers, as long as the investor does not rely on the broker to perform the key due to diligence tasks. Brokers can be an excellent source of information and a great way to source trust deed investments. They can make the process simple. Have a professional on your Team.
You will feel much comfortable. For inquiries call We will find and meet with borrowers, originate, underwrite, document, fund, and set-up the servicing of the loans. So contact us to discuss your options. Get the right info so you can make the right decision. You are in control. We become your broker and you stay as the lender. Contact us to find out about available trust deeds. If interested we will keep you informed. Get a FREE report. Call Now.
Once you are ready we are here to help. We deliver our services to you in an efficient, timely and professional manner. We are standing by. We can guide you. So Lets Talk. Want more Details. Ready to invest. We are, so lets set up a time to discuss. Call Now With that being said, our trust deed investors currently receive yields in the 7. This more conservative approach for investing in trust deeds minimizes risks. The trust deed investor is able to analyze each specific investment opportunity in regard to its real estate collateral and yield.
While NCF will always be available to provide the investor guidance and counseling on the trust deed investments, the ultimate decision is in the hands of the trust deed investor rather than a manager of a fund who might have conflicting interests in the investment decisions. Once the investment is made, the loan will be serviced though our Bureau of Real Estate regulated trust account and the investor will receive monthly payments. The investments will be handled by professionals who have over 40 years of experience brokering and servicing trust deed loans in California.
Whether you are new to trust deed investments or a seasoned investor, we welcome the opportunity to discuss our trust deed program with you.
