Potential Interest Income
Investors may seek periodic interest income based on the loan's stated rate and payment structure while the borrower performs according to the loan terms.
What Are California Trust Deed Investment Opportunities?
A trust deed investment generally allows an investor to fund a loan secured by California real estate and potentially earn interest from the borrower. Rather than purchasing the property itself, the investor participates as a lender. The individual opportunity can be evaluated based on factors such as the property, estimated value, loan amount, loan-to-value, lien position, stated interest rate, payment structure, loan term, borrower information, repayment strategy, and material risks.
Is Your Investment Capital Working as Hard as You Want It To?
The real question is not simply where your money is invested. It is whether your current strategy is producing the income, control, and asset-backed structure you want while remaining consistent with your risk tolerance.
Current State
Capital May Be Producing Less Income Than You Want
Some investors hold substantial capital in accounts or investments that may not align with their income objectives. Buying additional rental properties can create another set of challenges involving tenants, maintenance, management, insurance, and operating expenses.
Potential Future State
Participate as the Lender Instead of the Landlord
A trust deed investment may allow an investor to put capital to work through a loan secured by California real estate. Instead of taking ownership of the property at the outset, the investor evaluates the lending opportunity and its defined terms before deciding whether to participate.
Potential Income Is One Reason Investors Explore Trust Deeds
Certain Accelerated Lending Group trust deed opportunities may offer stated annual interest rates in the 8%–13% range, depending on the individual transaction.
8%–13% Potential stated annual interest-rate range on certain opportunities
The stated rate on an individual opportunity may reflect factors including the underlying property, estimated value, loan amount, loan-to-value, lien position, borrower, transaction structure, term, repayment strategy, and overall risk profile.
The 8%–13% range represents potential stated annual interest rates on certain trust deed opportunities. It is not a guaranteed return, guaranteed yield, or promise of investment performance. Opportunities, rates, terms, collateral, lien positions, borrower performance, and risk vary by transaction. Investors can lose some or all of their principal.
Why Consider Private Real Estate Lending?
Potential income matters, but an informed investment decision goes beyond the interest rate. Trust deed investing gives prospective investors the ability to evaluate an identifiable loan and the real estate securing it.
Real Estate Collateral
The underlying obligation is secured by a deed of trust against real property, providing identifiable collateral for the investor to evaluate.
Defined Transaction Terms
The loan amount, stated interest rate, payment structure, maturity, collateral, and lien position can be reviewed before an investment decision is made.
Transaction-Level Analysis
Rather than relying solely on a broad investment category, investors can evaluate information concerning the specific loan and property.
No Routine Landlord Duties
The borrower generally owns and operates the property, so the investor does not ordinarily take on routine tenant, maintenance, and property-management duties simply by funding the loan.
Investor Choice
Reviewing an opportunity does not obligate an investor to participate. Each transaction can be evaluated independently based on its structure and risks.
How Accelerated Lending Group Reviews a Lending Scenario
A potential trust deed opportunity begins with the underlying loan scenario. Accelerated Lending Group reviews transaction information before an opportunity is presented for investor consideration.
1
Borrower & Loan Request
The process begins with information concerning the borrower, requested financing, use of funds, property, and proposed transaction.
2
Property & Collateral Review
Available information concerning the real estate, estimated value, property type, condition, marketability, and other relevant collateral factors is considered.
3
Loan Structure
The proposed loan amount, loan-to-value, lien position, interest rate, payment structure, term, and other material loan terms are evaluated.
4
Repayment Strategy
The anticipated source of loan payments and principal repayment or exit strategy is considered as part of the overall transaction.
5
Opportunity Information
When appropriate, transaction-specific information can be provided to prospective investors for their own evaluation and due diligence.
6
Investor Decision
The prospective investor reviews the available information, considers the risks, and determines whether the individual opportunity is appropriate for them.
What Information Should an Investor Evaluate?
The stated interest rate is only one component of an investment decision. Understanding the collateral, leverage, loan structure, repayment strategy, and downside risk is critical.
✓
Underlying Property
Review the property type, location, condition, marketability, and other available property information.
✓
Estimated Property Value
Consider available valuation information while recognizing that an appraisal or estimated value does not guarantee the amount ultimately realized from a property.
✓
Loan-to-Value
Compare the proposed loan amount with the estimated property value to understand the transaction's leverage.
✓
Lien Position
Determine whether the loan is secured by a first, second, or other lien position and understand the priority and associated risks.
✓
Stated Interest Rate
Evaluate the stated rate in the context of the transaction's collateral, leverage, borrower, structure, and overall risk.
✓
Payment Structure & Term
Understand how payments are scheduled, whether the loan is interest-only or amortizing, and when the loan matures.
✓
Borrower & Repayment Strategy
Review available borrower information and the anticipated source of payments and repayment of principal.
✓
Default & Foreclosure Risk
Consider the potential consequences of nonpayment, including foreclosure time, expenses, senior claims, property costs, market conditions, and possible loss.
How Could a Stated Interest Rate Translate Into Income?
A simple hypothetical example can help illustrate the relationship between the amount invested and the stated annual interest rate.
Hypothetical Example $150,000 10.00% stated annual interest rate
Illustrative investment amount$150,000
Illustrative stated annual rate10.00%
Illustrative monthly interest$1,250
Illustrative annual interest$15,000
Illustration only: This example simply demonstrates the mathematical interest on $150,000 at a 10.00% stated annual interest rate. It does not represent a currently available investment, guaranteed payment, guaranteed return, or prediction of future performance. Actual opportunities and results vary. Late payments, borrower default, expenses, foreclosure, or other events may reduce or eliminate anticipated income and may result in loss of principal.
Why Explore Opportunities Through Accelerated Lending Group?
Private real estate lending requires more than matching an investor with a stated rate. The transaction itself matters. Accelerated Lending Group focuses on helping prospective investors understand the loan structure and available information concerning the underlying real estate.
California Real Estate Focus
Accelerated Lending Group focuses on California real estate finance, including private and hard money lending scenarios.
Borrower Assessment
Available borrower, property, loan-purpose, repayment, and transaction information is reviewed as part of the lending scenario.
Collateral-Focused Review
The real estate securing a proposed loan is an important component of evaluating a private lending transaction.
Defined Loan Structure
Loan amount, LTV, lien position, stated rate, payments, maturity, and repayment strategy help define the individual opportunity.
Investor Education
Prospective investors can learn how trust deed investing, collateral, lien priority, loan terms, default, and other risks work before deciding whether to participate.
No Obligation
Receiving information or reviewing an opportunity does not obligate a prospective investor to invest.
From Investment Opportunity to Funding
When an appropriate lending opportunity is available, the process is designed to give the prospective investor an opportunity to review relevant information before deciding whether to proceed.
1
Investor Opportunity
Information concerning an available trust deed opportunity may be provided to appropriate prospective investors.
2
Review the Transaction
Evaluate the property, loan amount, LTV, lien position, stated rate, payment structure, term, borrower information, repayment strategy, and disclosed risks.
3
Ask Questions
Seek clarification concerning available transaction information and consult independent legal, financial, tax, or other professional advisers when appropriate.
4
Make Your Decision
Determine whether the opportunity is consistent with your objectives, financial situation, investment experience, and risk tolerance.
5
Documentation & Escrow
If the transaction proceeds, applicable investment and loan documentation and closing requirements are completed.
6
Loan Funding
After applicable conditions and closing requirements are satisfied, the private real estate loan may fund through the applicable closing process.
Potential Income and Risk Must Be Evaluated Together
A higher stated interest rate can be attractive, but it does not eliminate investment risk. Understanding what could go wrong is just as important as understanding the potential income.
Trust Deed Investments Are Not Guaranteed
- Borrowers may make late payments or default.
- Property values may decline.
- An appraisal or estimated property value is not a guarantee of future value or recovery.
- Foreclosure may take time and involve legal, servicing, property, and other expenses.
- Senior liens, taxes, insurance, maintenance, environmental issues, or other claims can affect collateral and recovery.
- Trust deed investments may be illiquid and may not be readily sold or converted to cash.
- Expected interest payments are not guaranteed.
- Repayment of principal is not guaranteed.
- Investors may lose some or all of their investment.
California Investor Suitability Requirements
California law includes investor suitability requirements that may apply to broker-arranged trust deed transactions. Suitability and risk should be considered before investment capital is committed.
California Business & Professions Code § 10232.45
Prospective investors can review the California statutory requirements relating to investor suitability for applicable trust deed transactions.
California Business & Professions Code § 10232.45California Trust Deed Investment Opportunity FAQs
What is a trust deed investment opportunity?
A trust deed investment generally involves funding a loan secured by real estate. The investor may seek interest income from the loan while holding an interest in the real estate-secured obligation. The individual terms and risks depend on the specific transaction.
What stated interest rates may be available?
Certain Accelerated Lending Group trust deed opportunities may have stated annual interest rates in the 8%–13% range. Rates vary by transaction and are not guaranteed returns.
How does a trust deed investor potentially make money?
A trust deed investor generally seeks to earn interest paid by the borrower on the underlying real estate-secured loan. The investment amount, stated rate, payment structure, term, and borrower performance affect anticipated income.
Is the investment secured by real estate?
A trust deed loan is secured by a deed of trust against real property. The existence of real estate collateral does not, however, guarantee payment, property value, recovery of principal, or investment performance.
Does Accelerated Lending Group guarantee the borrower?
No. Trust deed investments involve borrower and real estate risk. Prospective investors should evaluate the individual transaction and should not interpret a loan review or presentation as a guarantee of borrower performance or investment outcome.
What should I evaluate before investing?
Consider the property, estimated value, loan amount, loan-to-value, lien position, stated interest rate, payment structure, term, borrower information, repayment strategy, transaction documents, and potential default scenario.
Do I have to invest when an opportunity is presented?
No. Reviewing information about an opportunity does not obligate you to participate.
Can I lose money on a trust deed investment?
Yes. Borrower default, declining property values, foreclosure costs, liens, taxes, insurance, property expenses, market conditions, and other factors may result in reduced returns or loss of some or all invested principal.
Continue Your Trust Deed Investor Research
Understanding both the opportunity and the risk is an important part of private real estate lending. Use these resources to learn more before deciding whether trust deed investing may fit your objectives.
Trust Deed Investor Guide
Learn how California trust deed investing works, including potential income, collateral, LTV, lien position, due diligence, and investment risk.
ALG Investor Process
Learn the steps involved in becoming a prospective Accelerated Lending Group trust deed investor and reviewing available opportunities.
California DRE Investor Education
Review educational information published by the California Department of Real Estate concerning trust deed investments.
Explore California Private Real Estate Lending With ALG
Accelerated Lending Group provides information concerning California private real estate lending and trust deed investment opportunities. Prospective investors can learn about the process, review available transaction information, understand applicable suitability requirements, and evaluate the potential income and risks before determining whether an individual opportunity may be appropriate.
Important Investment Disclosure: This page is provided for educational and informational purposes only and does not constitute individualized investment, financial, legal, or tax advice. Nothing on this page should be interpreted as a guarantee, promise of performance, or assurance of repayment. References to an 8%–13% range describe potential stated annual interest rates on certain opportunities and do not represent guaranteed returns or yields. Investment opportunities are subject to availability, transaction-specific terms and documentation, investor suitability, applicable law, and risk. Borrowers may default, collateral values may change, foreclosure may involve time and expense, and investors may lose some or all of their principal. Prospective investors should review applicable transaction documents and consult their own qualified professional advisers when appropriate.
Accelerated Lending Group • NMLS 1563471 • CA DRE 02022124