Trust Deed Investments In Fort Myers – What To Look For And What To Avoid

Trust deed investments in Fort Myers Florida can be a fantastic way to earn solid returns and diversify.

In fact, trust deed investments are one of the methods that the wealthy use to make much bigger returns on their investments than anything you can get on the open market.

In a nutshell, a trust deed investment is a private loan that’s secured by real estate.

The majority of these loans have a short-term duration, typically lasting less than two years, and usually come with a relatively high interest rate. Rates of 7-15% are common, even in a market where traditional banks are offering loans with rates ranging from 3-7%. This significant difference in interest rates can result in much higher overall borrowing costs for borrowers who rely on short-term, high-interest loans. For instance, let’s say you borrow $10,000 at an interest rate of 10% for a year. You would end up paying $1,000 in interest over the course of the loan. In comparison, if you were able to get a traditional bank loan with a 5% interest rate for the same amount and timeframe, you would only pay $500 in interest. That’s a difference of $500! And that’s just for a one-year loan on a relatively small amount of money. The interest rate disparity can become even more substantial for larger loans or longer repayment terms.

Surprisingly, there’s a lot of competition from borrowers who are willing to pay these kinds of rates to lenders – and an increasing number of investors who are interested in funding them.

Why would investors take deals that banks would pass on?

There are lots of reasons, so let’s start with the basics.

Banks and lenders fall under a lot of regulations that private money lenders don’t necessarily have to follow, especially since they’re not federally insured.

Investing in local trust deeds is akin to traditional, old-school investing. Trust deeds are rooted in trust, reminiscent of a time when agreements were often sealed with handshakes, and legal disputes were less prevalent.

Trust deeds aren’t just based on credit scores and ratios.

For these deals, insider knowledge, relationships and potential value matters a lot more than the score assigned by a computer.

But like other high-return investments, there’s a lot of risk involved if you don’t know what you’re doing.

Successful trust deed investors collaborate with trustworthy brokers, attorneys, and experts. These professionals assist in thoroughly evaluating the loan’s complete potential and analyzing associated risks, contributing to the investors’ ability to generate significant returns.

If you’re interested in capturing solid returns from the local Fort Myers trust deed marketplace, we may be able to help you.

We get requests from people who are looking to borrow money secured by real property (with equity!) who don’t qualify for traditional financing.

As a general rule, most investors want a high degree of security that the borrower stands to make 20-50% ROI with the funds he or she borrows. If the borrower’s plan is too risky or shows signs of probable failure, it’s wise to pass on the investment.

We’re not brokers – sometimes, we may partner with qualified investors to secure deals, and a trust deed is one tool at our disposal.

If you’re looking to invest in Fort Myers Florida real estate – not just in trust deeds – give us a call anytime at 239-360-3176.

We’re happy to talk with you about our services and discuss how we can help you make money in real estate.

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