trust deed investing

General Real Estate Investing
1

is it possible to invest in trust deeds in the same way that you could invest in real estate?

that is, to take out a long-term loan and use the money to invest in trust deeds and use the interest to pay back the loan?

  1. if a trust deed pays 10% interest, is that 10% per year for as long as the loanee keeps the money OR is that 10% on the entire amount of the loan, regardless of how long it takes to pay it back?

  2. do you have to keep finding new trust deeds every year? that is, you do one for one year, pay the proportionate amount of the loan you took out to finance your trust deed investment for that year (paying monthly), and then find another trust deed for year 2 of the loan, pay the bank that year, find another for year 3, pay the bank that year…and so on.

  3. can you make the trust deed the collateral for your loan with the bank? if so, are banks ok with the trust deed changing every year during the loan?

  4. are there going to be enough trust deeds around to invest in year after year to get your bank loan paid off every year for 10 years?

thanks to anyone who knows about trust deeds and can answer my questions!!

2

It is possible to do such investing. You just have to do like you would with any cash flow invetment. Line up the credit line and find out what your payment is going to be. Then make sure that the payment you receive each month is greater. The best way to get started in my opinion is to start finding and brokering the notes. This will allow you to raise initial capital.
-David