No Tenants to Manage
The borrower owns and operates the property. The trust deed investor is not taking on ordinary landlord responsibilities simply by funding the loan.
Could Your Capital Be Working Harder?
Investors often face a tradeoff: pursue greater income potential and accept more complexity or risk, or leave capital in investments that may not produce the income they want. Trust deed investing introduces another option worth understanding.
Current State
Capital That May Not Be Producing the Income You Want
Some investors have capital in accounts or investments that may not align with their current income objectives. Others want exposure to real estate but do not want to purchase, operate, repair, or manage another property.
Desired Future State
Real Estate Exposure With Defined Loan Terms
Trust deed investing can allow an investor to evaluate a specific property, loan amount, loan-to-value, lien position, stated interest rate, payment structure, term, and anticipated repayment strategy before deciding whether to participate.
Explore the Earning Potential of Private Real Estate Lending
Individual Accelerated Lending Group trust deed opportunities may offer stated interest rates that vary according to the property, loan structure, lien position, term, borrower, loan-to-value, and overall risk profile.
8%–13% Potential stated annual interest-rate range on certain opportunities
For investors seeking income, the appeal is straightforward: capital is used to fund a real estate-secured loan, and the loan's payment terms may provide periodic interest income.
The 8%–13% range reflects potential stated interest rates on certain trust deed opportunities and is not a guaranteed return, guaranteed yield, or promise of investment performance. Opportunities and terms vary. Borrower default, late payments, servicing expenses, foreclosure costs, property-value changes, and other risks can affect actual results and repayment of principal.
How Do California Trust Deed Investors Make Money?
Trust deed investors generally seek income from interest paid on a real-estate-secured loan. The stated interest rate, investment amount, payment structure, and term determine the anticipated interest payments. Actual results depend on borrower performance and the individual transaction. Interest income and repayment of principal are not guaranteed.
What Could the Interest Income Look Like?
A simple hypothetical example can help illustrate how stated interest translates into potential monthly income.
Illustrative Investment $100,000 11.00% stated annual interest rate
Investment amount $100,000
Illustrative stated annual rate 11.00%
Illustrative monthly interest $916.67
Illustrative annual interest $11,000
Illustration only: This mathematical example assumes a $100,000 investment at an 11.00% stated annual interest rate and does not represent a specific available investment, guaranteed payment, guaranteed return, or prediction of future performance. Actual investment terms and results vary. Default, late payments, costs, or other events can reduce or eliminate anticipated income and may result in loss of principal.
Real Estate Exposure Without Becoming the Property Owner
Trust deed investing is fundamentally different from buying a rental property. The investor participates as a lender rather than purchasing the real estate directly.
No Property Purchase Required
Instead of acquiring the real estate, the investment is tied to a loan secured by a deed of trust against the property.
Defined Investment Terms
Investors can review the stated rate, loan amount, payment structure, maturity, lien position, collateral, and other transaction terms before deciding whether to invest.
The absence of ordinary landlord responsibilities does not eliminate investment responsibilities or risk. A borrower default may require servicing, enforcement, foreclosure, or other actions relating to the collateral.
What Is a California Trust Deed Investment?
A California trust deed investment generally involves funding a loan, or acquiring an interest in a promissory note, where repayment is secured by a deed of trust recorded against California real property. The investor's potential income comes from the loan's stated interest and payment terms. Real estate collateral provides security for the obligation but does not guarantee repayment or prevent investment loss.
Look Beyond the Interest Rate
Earning potential matters—but the stated rate should never be the only reason to consider an opportunity. Understanding what stands behind the loan is equally important.
| Review | Why It Matters |
|---|---|
| Property Value | The estimated value, condition, location, property type, and marketability help an investor evaluate the collateral. |
| Loan Amount & LTV | Loan-to-value compares the loan amount with the estimated property value and helps illustrate the estimated equity cushion. Property values can change. |
| Lien Position | First and junior deeds of trust have different priorities and risk characteristics. |
| Stated Interest Rate | The stated rate helps determine anticipated interest income, but it does not guarantee the investor's actual return. |
| Payment Structure | Review whether payments are interest-only, amortizing, or structured another way, as well as payment frequency. |
| Loan Term & Maturity | Understand how long the capital may be committed and when the principal is scheduled to be repaid. |
| Borrower & Repayment Strategy | Understand the contemplated source of payments and how the borrower expects to repay the principal at maturity. |
| Default Scenario | Consider what may happen if payments stop, including foreclosure timing, legal expenses, senior liens, taxes, insurance, and property-related costs. |
Earning Potential and Risk Go Together
A higher stated interest rate should not be viewed in isolation. Understanding the downside is part of evaluating whether an opportunity fits your objectives and financial circumstances.
Trust Deed Investments Are Not Risk-Free
- Borrowers can make late payments or default.
- Property values can decline.
- An appraisal or valuation may not equal the amount ultimately realized from a property.
- Foreclosure can take time and involve legal and property-related expenses.
- Senior liens, taxes, insurance, maintenance, environmental conditions, or other claims can affect the collateral.
- Trust deed investments may be illiquid.
- Expected interest payments and repayment of principal are not guaranteed.
- Investors may lose some or all of their principal.
How the Accelerated Lending Group Investor Process Works
The objective is not simply to show you a stated rate. It is to provide information about an opportunity so you can evaluate the transaction and determine whether it may be appropriate for you.
1
Investor Inquiry
Connect with Accelerated Lending Group and learn about the trust deed investor process.
2
Investor Suitability
Applicable suitability information and requirements are addressed before an investor participates in an opportunity.
3
Review the Opportunity
Evaluate available information about the property, loan, collateral, LTV, lien position, rate, term, borrower, repayment strategy, and risks.
4
Perform Due Diligence
Review the information and obtain independent legal, tax, financial, or other professional advice when appropriate.
5
Make Your Decision
If the opportunity is available, suitable, and consistent with your objectives and risk tolerance, you can determine whether you wish to participate.
6
Payments & Servicing
The transaction documents and servicing arrangements govern payments, maturity, late payments, defaults, and other loan administration.
California Trust Deed Investor Suitability
Prospective investors should understand the California requirements that may apply to investor suitability in broker-arranged trust deed transactions.
California Business & Professions Code § 10232.45
Review the California statutory requirements relating to investor suitability for applicable trust deed transactions.
California Business & Professions Code § 10232.45California Trust Deed Investing FAQs
How much can a California trust deed investor earn?
Potential income depends on the stated interest rate, investment amount, payment structure, borrower performance, term, expenses, and other factors. Certain Accelerated Lending Group opportunities may have stated annual interest rates in the 10%–13% range, but rates vary by transaction and neither income nor investment performance is guaranteed.
How are trust deed investors paid?
Payment arrangements depend on the individual note and servicing structure. An investment may provide periodic interest payments according to the loan documents. Investors should review the payment schedule and servicing arrangements for each opportunity.
Are trust deed investments secured by real estate?
Trust deed investments involve a loan secured by a deed of trust against real property. Real estate collateral is an important component of the transaction, but it does not guarantee payment, principal repayment, property value, or investment performance.
Do trust deed investors have to manage the property?
Ordinarily, the borrower remains the property owner, so the investor does not take on the routine landlord responsibilities associated with directly owning a rental property. A default, however, may require enforcement or foreclosure and can create additional costs and responsibilities.
Are trust deed investment returns guaranteed?
No. Stated interest rates and anticipated payments are not guaranteed returns. Borrower default, late payments, property value changes, foreclosure expenses, servicing costs, and other events can affect actual investment results. Investors may lose principal.
What is loan-to-value in trust deed investing?
Loan-to-value, or LTV, compares the loan amount with the estimated value of the real estate securing the loan. It can help an investor evaluate the estimated equity supporting the transaction, but property values are not guaranteed.
What is the difference between a first and second deed of trust?
Lien position determines priority relative to other liens against the property. A first deed of trust generally has priority over a second or junior deed of trust, subject to applicable law and other claims. Junior liens therefore have different risk characteristics.
What happens if a trust deed borrower defaults?
The available remedies depend on the loan documents, lien position, servicing arrangements, California law, and the circumstances of the transaction. Enforcement may involve foreclosure, which can take time and involve legal, property-related, and other expenses.
Is a higher interest rate always a better investment?
No. The stated interest rate should be considered together with the property, valuation, LTV, lien position, borrower, repayment strategy, maturity, liquidity, documentation, and potential downside risk.
Learn More Before You Invest
Understanding the opportunity is part of making an informed investment decision. Explore additional ALG investor education and process information.
California Trust Deed Investor Guide
Learn more about private real estate lending, trust deeds, collateral, and the factors investors may consider.
Our Investor Process
Learn how prospective trust deed investors can connect with Accelerated Lending Group and understand the investor process.
California Department of Real Estate Investor Education
Prospective investors may also review educational information published by the California Department of Real Estate concerning trust deed investments.
California DRE — Trust Deed Investments: What You Should Know
California Trust Deed Investing With Accelerated Lending Group
Accelerated Lending Group provides information about California real estate finance and trust deed investment opportunities. Our goal is to help prospective investors understand potential income, collateral, transaction structure, investor suitability, due diligence, and material risks before making an investment decision.
Important Investment Disclosure: This page is for educational and informational purposes only and does not constitute individualized financial, investment, legal, or tax advice. References to stated interest rates or potential income do not constitute a promise or guarantee of investment performance. Investment opportunities are subject to availability, transaction-specific documentation, eligibility, investor suitability, applicable law, and risk. Past performance, if any, does not guarantee future results. Stated interest rates, payments, property values, maturity payoff, and repayment of principal are not guaranteed. Investors may lose some or all of their principal. Prospective investors should review applicable transaction documents and consult their own qualified advisers when appropriate.
Accelerated Lending Group • NMLS 1563471 • CA DRE 02022124