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  • June 9, 2010 at 6:05 PM #17544
    34f3f3f
    Participant

    Has anyone any experience of investing in Trust Deeds, and/or LLPs. Trust Deeds seem fairly straight forward, and I guess the risk is, as ever, from defaulting borrowers. Are mortgage brokers the normal route for investing? LLPs don’t seem well documented as a passive investment, so I’m assuming there’s no middle man. Any information, experience much appreciated.

    June 9, 2010 at 8:46 PM #561585
    EconProf
    Participant

    I’ve made lots of money on TDs and lost a fair amount too. Many pitfalls, and not for the amateur. Best in a rising market too, with low loan-to-value ratios and superconservative estimates of value of the collateral.
    DO NOT trust the person pitching the TD; get a second opinion from someone very experienced doing TDs. So many ways to lose…you need to demand 12% interest, at least, to offset all the research and legwork you need to do.
    LLPs? They are even more dangerous.

    June 9, 2010 at 8:46 PM #561684
    EconProf
    Participant

    I’ve made lots of money on TDs and lost a fair amount too. Many pitfalls, and not for the amateur. Best in a rising market too, with low loan-to-value ratios and superconservative estimates of value of the collateral.
    DO NOT trust the person pitching the TD; get a second opinion from someone very experienced doing TDs. So many ways to lose…you need to demand 12% interest, at least, to offset all the research and legwork you need to do.
    LLPs? They are even more dangerous.

    June 9, 2010 at 8:46 PM #562179
    EconProf
    Participant

    I’ve made lots of money on TDs and lost a fair amount too. Many pitfalls, and not for the amateur. Best in a rising market too, with low loan-to-value ratios and superconservative estimates of value of the collateral.
    DO NOT trust the person pitching the TD; get a second opinion from someone very experienced doing TDs. So many ways to lose…you need to demand 12% interest, at least, to offset all the research and legwork you need to do.
    LLPs? They are even more dangerous.

    June 9, 2010 at 8:46 PM #562285
    EconProf
    Participant

    I’ve made lots of money on TDs and lost a fair amount too. Many pitfalls, and not for the amateur. Best in a rising market too, with low loan-to-value ratios and superconservative estimates of value of the collateral.
    DO NOT trust the person pitching the TD; get a second opinion from someone very experienced doing TDs. So many ways to lose…you need to demand 12% interest, at least, to offset all the research and legwork you need to do.
    LLPs? They are even more dangerous.

    June 9, 2010 at 8:46 PM #562571
    EconProf
    Participant

    I’ve made lots of money on TDs and lost a fair amount too. Many pitfalls, and not for the amateur. Best in a rising market too, with low loan-to-value ratios and superconservative estimates of value of the collateral.
    DO NOT trust the person pitching the TD; get a second opinion from someone very experienced doing TDs. So many ways to lose…you need to demand 12% interest, at least, to offset all the research and legwork you need to do.
    LLPs? They are even more dangerous.

    June 9, 2010 at 11:17 PM #561635
    murf2222
    Participant

    I’ve been looking into this type of investment as well….Specifically short term 1st Trust deeds (hard-money loans). The LTV ratio loaned out on these is in the 60% neighborhood, so the borrower has quite a bit of skin in the game and a huge motivation to perform.

    The area that could pose the biggest problem is not getting an accurate appraisal, but as long as that base is covered I just don’t see a downside to it. Compared to the volatility of the stock market lately It looks like a viable alternative. I’m really close to pulling the trigger myself, so I’d like to hear other opinions too.

    June 9, 2010 at 11:17 PM #561734
    murf2222
    Participant

    I’ve been looking into this type of investment as well….Specifically short term 1st Trust deeds (hard-money loans). The LTV ratio loaned out on these is in the 60% neighborhood, so the borrower has quite a bit of skin in the game and a huge motivation to perform.

    The area that could pose the biggest problem is not getting an accurate appraisal, but as long as that base is covered I just don’t see a downside to it. Compared to the volatility of the stock market lately It looks like a viable alternative. I’m really close to pulling the trigger myself, so I’d like to hear other opinions too.

    June 9, 2010 at 11:17 PM #562228
    murf2222
    Participant

    I’ve been looking into this type of investment as well….Specifically short term 1st Trust deeds (hard-money loans). The LTV ratio loaned out on these is in the 60% neighborhood, so the borrower has quite a bit of skin in the game and a huge motivation to perform.

    The area that could pose the biggest problem is not getting an accurate appraisal, but as long as that base is covered I just don’t see a downside to it. Compared to the volatility of the stock market lately It looks like a viable alternative. I’m really close to pulling the trigger myself, so I’d like to hear other opinions too.

    June 9, 2010 at 11:17 PM #562335
    murf2222
    Participant

    I’ve been looking into this type of investment as well….Specifically short term 1st Trust deeds (hard-money loans). The LTV ratio loaned out on these is in the 60% neighborhood, so the borrower has quite a bit of skin in the game and a huge motivation to perform.

    The area that could pose the biggest problem is not getting an accurate appraisal, but as long as that base is covered I just don’t see a downside to it. Compared to the volatility of the stock market lately It looks like a viable alternative. I’m really close to pulling the trigger myself, so I’d like to hear other opinions too.

    June 9, 2010 at 11:17 PM #562621
    murf2222
    Participant

    I’ve been looking into this type of investment as well….Specifically short term 1st Trust deeds (hard-money loans). The LTV ratio loaned out on these is in the 60% neighborhood, so the borrower has quite a bit of skin in the game and a huge motivation to perform.

    The area that could pose the biggest problem is not getting an accurate appraisal, but as long as that base is covered I just don’t see a downside to it. Compared to the volatility of the stock market lately It looks like a viable alternative. I’m really close to pulling the trigger myself, so I’d like to hear other opinions too.

    June 10, 2010 at 1:19 PM #562021
    2009 Buyer
    Participant

    I am also interested. Could you share the logistics? Are u dealing with a broker or directly w/ the lending institution?

    Are the deeds for local property? Commercial ?

    Can you get better
    deals if we work as a block? Higher amounts?

    June 10, 2010 at 1:19 PM #562117
    2009 Buyer
    Participant

    I am also interested. Could you share the logistics? Are u dealing with a broker or directly w/ the lending institution?

    Are the deeds for local property? Commercial ?

    Can you get better
    deals if we work as a block? Higher amounts?

    June 10, 2010 at 1:19 PM #562617
    2009 Buyer
    Participant

    I am also interested. Could you share the logistics? Are u dealing with a broker or directly w/ the lending institution?

    Are the deeds for local property? Commercial ?

    Can you get better
    deals if we work as a block? Higher amounts?

    June 10, 2010 at 1:19 PM #562725
    2009 Buyer
    Participant

    I am also interested. Could you share the logistics? Are u dealing with a broker or directly w/ the lending institution?

    Are the deeds for local property? Commercial ?

    Can you get better
    deals if we work as a block? Higher amounts?

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