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It is most generally acknowledged that the person’s early years such as the twenties is the best time to start investing. After all, you have all of life ahead to invest money which is why so many books on investment – most actually – are geared towards the twenties. Fewer are towards the thirties, and even fewer towards the forties and retirement. This may be partly why trust deed investing is so appealing. In today’s low-return low-interest-rate environment, trust deed investing is one of the few investment options that can help you substantially increase the amount of your monthly income. And little expense is involved. (Although risk is another matter).

What is trust deed investment?

Trust deeds are like a private real estate loan. If you’re a real estate entrepreneur (for instance) who wants to snap a fast loan to rehab a piece of property in order to sell at a profit, trust deed investors may be your best choice. They’d give you the loan in a blink’s eye far faster than the bank where it takes drawn out negotiations and filing of hefty tomes until you get that loan. (If at all). The average amount of time is 60 days. Some entrepreneurs cannot wait that long. They need to snap that deal and that’s where the trust deed investor comes in handy. He forks over your required funds within that same week, sometimes that same day at 1/3rd of the paperwork and nil of the stress. The downside is that the borrower pays a much higher rate than he might for a mortgage, typically 8% to 12% (since the investor is taking more of a risk).

How does it work?

The process is such that the buyer works through a third-party loan originator who underwrites and facilitates the loan for one year. Schedules can be restructured, but generally the borrower makes interest-only payments each month and a balloon payment of the principal once the loan reaches its maturity.

So let’s say you’re the investor and you fund 250,000 at 10% APR, you’ll either receive 12 interest payments of $2,083 each, totaling $25,000, and at the end of the year, get back your $250,000. Or, in the worst case scenario, you pocket the defaulting borrower’s land.

Other things you’ll want to know…

There’s no set minimum for investing in a single trust deed. They can be fractionalized – that is, divided into several portions – but loan originators generally prefer to deal with one investor per loan.

Finding trust deeds to invest in can be difficult. Your best bet may be to find an experienced broker or advisor with a history of success. These have likely established relationships with originators and you can work through them. If you don’t want to hunt these deals down, you might invest in a trust deed fund run by a professional manager. These funds currently pay between 8% and 11% per year and have minimum investment amounts that start around $50,000.

To acquire credibility, you may want to consider running for SEC licensing.

Pluses of investing in trust deeds

The pluses are particularly topical now with the Fed hiking its interest rates and maybe hiking them still higher. Trust deed investments protect you from the shenanigans for rising rates because they’re held to maturity and have short durations. You can also use any sort of cash to invest. You automatically have the right to foreclose on any property when the borrower has defaulted on the loan. Trust deed investing can open the door to other investment opportunities. It also offers a return on investment that comes in at higher than average; expect a typical return of 9 to 14 percent. And, if managed well, this type of investing is secure. This is because it has a guaranteed yield.

Minuses of investing in trust deeds

The obvious minus is the very likely possibility of your investment defaulting, namely the borrower not paying you back. This happens to approximately 85 % of private money lenders at some time in their lives, some more than others. Redfin, a residential real estate company that provides web-based real estate database and brokerage services, predicts that it is going to happen to many more this coming year when housing prices are going to lurch beyond restraint

Managing risk…

How can you prevent losing your money? Experts strongly advise lenders to research client’s credit history and trustworthiness. They also recommend that you research the value of the client’s property and the extraneous market environment to the point that you physically investigate the building yourself. If you’re not up to this, consider hiring an advisor with experience in this market. Before you invest, analyze a fund’s portfolio and the loan loss reserves. As with individual trust deeds, you may want to have a professional do this.

In short…

NerdWallet, one of the leading advisory websites on investments has this to say: If you exercise due caution, trust deed investments can be a great income generator at a time when investments that produce good returns are few and far between.

You may want to consider it.

Yanni Raz is a hard money lender and trust deed investing specialist from Los Angeles California. Yanni write related blogs to educate potential real estate investors. “Before investing your money in any deal, read my articles.”

Starting a home based business is rarely an easy decision. If you are contemplating or have already started a home based business, you need to seriously consider purchasing business insurance.The main positive aspect in the decision process is the fact that you will be working at home. If you own your own home, you most likely believe that by having home insurance your business will be protected under the same policy. That could not be further from the truth. Your home owners insurance covers your house as a “home”. Depending on the type of business you are operating, the simple actions of running your business could actually nullify your home owners policy. Filing a claim on your home owners insurance based on your home business activities most likely would render it void and could lead to charges of insurance fraud being brought against you.Business insurance is designed to protect your business activities as well as all equipment owned, or used, by the business. This would include any specialized equipment, computers and accessories, office furniture and any other required materials or products needed for your business. If the total value of these items exceed the coverage of your home owners insurance for the contents of your home, you need business insurance.If your business brings customers or clients to your home, you should, at the very least, have general liability insurance. With this type of policy, if your client or customer is hurt or injured while on your property, the claim will be against the business not your home.If your home based business involves consulting services or any type of professional advice, professional liability insurance should be considered. With this type of policy, should a client bring a claim against your business to recover losses due to your advice, you personal property will be protected.Another item to consider is your vehicle. If you use your personal vehicle for business purposes, it should be covered as such. The last thing your business needs is for you to get in an accident while making a delivery only to have your claim denied or worse, be accused of a fraudulent claim.Lastly, if your business has you as its only employee or simply cannot function without you at the helm, disability insurance is a must. This type of policy provide coverage for any wages you would lose should you become disabled and not be able to work.Starting your home based business was a big decision. Protect it.

Unless you are a butterfly who hasn’t been born yet or are a larva stuck in that cocoon you may have noticed a insurgence of people starting a successful home based business in the last few years. Coincidence? Why is this happening? If you look at the Internet you will find many reasons.Many people are now realizing (like many have for decades) that there is no security with a job anymore. Ask yourself this, do you know even one person who has lost their job in the last few years in this economy?So why should someone think outside the box and start a successful home based business? Well, there is a big difference having a home based business and running a successful home based business first of all, but you started one to become successful, right? Let me start by addressing the benefits of having a home based business first of all as compared to a w-2 employee.As a w-2 employee you do not get to write off your car mileage every day that you go to work but you can when you have your own business for business purposes. If you travel for your job you do not get to write that off on your taxes either, the company does. You can expense it, but not use it as a w-2 write off. If you are trying to have a successful home based business and have an office at home, you can write off your utility bills based on the square footage of the office space. You can write off supplies for your computer or printer needs, you can also write off your cell bill or internet service if you use those as a way to grow your business. Now, let me say I am not a tax advisor or CPA but when I do my taxes I have my schedule C all filled out with my operating expenses and it has consistently paid me between 8K and 10K dollars a year to have a home based business as compared to having a job and fighting that rat race as many people say on their commutes to work especially on a Monday morning. The many benefits go on and on. Ask your CPA or H and R block guy then next time you do them in a few months here upcoming.Ask your self this question why is the tax system set up differently for different people? Doesn’t it make sense to take advantage of something that can better yourself in the long run and set up a successful home based business. Most of these businesses you can start for less than one thousand dollars.Now, if you are looking at that and saying I don’t have an extra thousand dollars to invest in myself. Then look at what you are doing now and be honest with yourself. Is what you’re doing getting you ahead in life? If not then something has to change or you will always have what you got. Now think of where you work, was that company started with that little of money, odds are probably not. Not to mention all the governmental regulations that businesses have to comply with (not saying it’s all bad) but when I used to work for a governmental compliance company I would hear from a lot of small and medium sized traditional business owners that between workman’s compensation and insurance and rising rates it can be tough to compete with the competition due to the large amount of overhead and to bring in just enough to break even before they even begun to profit. Ask anyone who owns a brick and mortar business and has these issues.So overall it will pay you in the long run to start a successful home based business which is why so many people are getting involved in the network marketing field. In my opinion there is no better model to get all the benefits and advantages for owning your own life again and leave the cell when you’re in cubicle prison. (Sorry I used to be in several of those with my former jobs so I had to say it…big laugh). And one final thought with having a successful home based business. Robert Kiyosaki advises that you start something on your own so that you won’t be part of the middle class who will continue to be wiped out into poverty in this world over the next few decades.