In the world of investment, security is paramount. Investors seek avenues that offer not just potential returns, but also a shield against the uncertainties of the market. Deed of trust investments stand out in this regard, offering a unique layer of security backed by tangible assets – typically real estate properties. Let’s delve into how this collateral security transforms the landscape of investing, providing investors with peace of mind and confidence in their financial decisions.

Secured by Tangible Assets:

Deed of trust investments involve lending money to borrowers, who use real estate properties as collateral for the loan. Unlike some other forms of investment, where the underlying assets may be intangible or subject to market volatility, deed of trust investments are firmly rooted in the physical realm. This means that in the event of default by the borrower, investors have a tangible asset to fall back on – the property itself.

Reduced Risk and Enhanced Stability:

The presence of collateral fundamentally alters the risk profile of deed of trust investments. While no investment is entirely without risk, the inclusion of tangible assets as security significantly reduces the level of risk compared to other investment types. Even in the face of economic downturns or borrower defaults, investors have recourse to the underlying property, mitigating potential losses.

Moreover, the stability offered by collateral-backed investments can help investors weather turbulent market conditions with greater resilience. Real estate, as an asset class, has historically exhibited lower volatility compared to stocks or bonds. By incorporating deed of trust investments into their portfolios, investors can introduce a layer of stability that serves as a buffer against market fluctuations.

Peace of Mind for Investors:

Perhaps the most compelling aspect of collateral security in deed of trust investments is the peace of mind it provides to investors. Knowing that their investment is backed by a tangible asset instills a sense of confidence and assurance. Even in uncertain times, investors can take solace in the fact that their financial interests are protected by the value of the underlying property.

This peace of mind extends beyond mere financial considerations. It engenders a sense of trust and stability in the investment process, fostering long-term relationships between investors and borrowers. Investors can approach deed of trust investments with a clarity of purpose, knowing that their capital is working towards tangible outcomes – the acquisition, development, or improvement of real estate properties.

In conclusion, collateral security lies at the heart of deed of trust investments, anchoring them in a foundation of stability and reliability. By leveraging tangible assets as collateral, investors can mitigate risk, enhance stability, and gain peace of mind in their investment endeavors. As the investment landscape continues to evolve, the importance of collateral security remains unwavering, offering a beacon of stability amidst the ebb and flow of financial markets.

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2nd lien lending


There are so many options in the lending world, especially when we are lending to real estate investors.

One of the highest demanded loan options is lending on a property in 2nd lien position.

First off let’s clarify what I mean by a lien.  When you lend money with real estate as collateral you create a mortgage and or deed of trust.

When the mortgage or deed is recorded with the county it creates a lien against the property.  The lien gives the lender protection in case the borrower stops paying the loan as agreed (and other ways that put the loan in default).

What does lending in 2nd position mean.

All recorded deeds or mortgages (depends on the state the property is in if its a deed or mortgage) create a lien on the property.

Lien position is the priority of the liens on the property.  In other words who has first rights to the property if a loan defaults.

It is not the size of the loan but who has recorded the deed/mortgage first.  First come gets lien position number one.

All other recorded


Why lend in 2nd position.

The number one reason is the amount needed for a 2nd lien position loan is normally smaller.  The truth is there are more private lenders who have $25k vs $250k.

The second most popular reason is baby steps, it is easier to start lending with a smaller amount at risk.

Typically you will receive a higher note rate and possible fees…most 2nd mortgages


Why there is a demand for 2nd liens.


What are the added risks.

you do not have first rights to the property

if the borrower defaults on the the 1st mortgage you may have to pay them off to


Must do’s on 2nds


Get cross

Get PG


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The majority of private lenders like to know what type of credit risk their borrowers might be.  Here is a quick guide to how lenders group credit risk based on their scores.

Please use this as a reference but not the only criteria to decide if a borrower is credit worthy.


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Lending vs flipping


Loan Reviews

You Don’t Have to Flip Out!


Leaking toilets.

Needy tenants.

Smelly carpet.


Yeah, owning real estate can be a huge hassle. If you like demo work and calling plumbers at 3 a.m., then sure. Fixing and flipping or renting properties is perfect for you.

But, let’s face it.

Most of us don’t want to do that work. We want our money to do the work for us.

We don’t have to be like Chip and Joanna Gaines on HGTV’s Fixer Upper. We can invest in real estate without everbuying a single property.

Real estate investing (REI) covers a wide spectrum of possibilities. It’s not just about fixing and flipping or renting. It’s about putting your money to work the way you want to.

That might include things like wholesaling, wholetailing, OPM (other people’s money), and private notes.

Quick story:

I went to a real estate conference a few years ago. The MC said something that really resonated with me.

During his speech, he looked out at the audience and said, “Half of you in this room have money to invest, and the other half need money to invest.”

In other words, half of the audience was private lenders, and the other half was fix and flippers…and they needed to partner up.

Those with money assumed they had to be fix and flippers.

But it’s not true, because if you have money, you can invest in real estate the way you want.

That might mean you lend your money directly to a fix and flipper.

Let them do the actual work (and take on the higher risks) while you collect monthly interest payments.

That’s the way I’ve always preferred investing in real estate notes. Why buy the house and do all the work when I can let someone else do the work and still make money?

It’s so easy compared to fix and flipping!

It’s also way more stable than the stock market.

There are so few people who know about private notes and how they offer a safe, lucrative option in the REI world.

I want you to know about private notes so you can invest in your future the way you want to.

I want you to experience:

  • Less volatility than the stock market.
  • Less stress than fixing and flipping.
  • Less hassle than renting.
  • More income.

Are you ready to learn more about private notes and examine the entire REI Spectrum?

Then let’s talk more!

  • Send me your REI questions. I’m here to personally answer them for you. Just reply to this email and ask away!
  • For the next 23 days, I’m offering a free 30-minute consultation. Just respond with, “Let’s Chat” and we’ll schedule a time to talk.
  • Ready to go but need guidance? I’m here to personally coach you on private notes and how they can help you reach your exact

Happy investing!




Lending vs flipping

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Private lending and your team


Your Team

Private real estate lending is not a solo venture.

It requires the best team you can find to help you create the best note for you

and your family.

Private lending and your team.

Before we jump into who should be on your team, let’s remember that the cost of each one is normal for borrowers. They’re used to paying for these services. If anyone tries to talk you out of using one or all of these “teammates,” it’s probably a good idea to walk away and find someone else to lend your money to.

Below is the recommended minimum to get a loan properly closed.

Attorney. To make sure your paperwork is legal, proper and protects you.

Closing agent. A third party that handles the paperwork, filings, and money transfers.  This is typically an attorney, escrow company, or title company.

Valuation services. A realtor or appraiser who provides an as-is value for the property.

Title company. Provides title insurance to insure you are in the proper lien position (preferably first lien position).

Insurance company. Provides protection from fire or other loss on the property.

You may also wish to hire the following:

Servicing company. Will collect payments and verify taxes and insurance are paid in a timely fashion.

Note company.  Help find, underwrite, and close each loan.

Every closing and every state handle private notes/real estate differently, so it’s likely you will have a different team each of you will have a different team.


Step by step roadmap shows you the path of funding a private note.

Private lending and your team

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Private Lending the Basics-Terms


The Basics

There are some general terms every private note investor should understand before they being their journey. Here are some private lending the basics-terms:

Loan: A loan is the lending of money between one or more individuals or organizations to other individuals or organizations. The recipient incurs a debt and is usually liable to pay interest on that debt until it is repaid in full. “In full” means that they will pay the lender back the principal amount, or the amount of the loan, plus interest.

Valuation: The current worth of a property.

Mortgage/Deed of Trust: A legal document that secures a property and legally puts it in your borrower’s name (trustee) and your name (lender).

Title Company: A vital third party that ensures a property is legally transferred and your loan is well-protected.

Loan Amount: The total amount the borrower is seeking for their project. This might encompass the property purchase price, renovation costs, and/or closing fees.

Lien: When you secure a loan on a property, you will be given a lien position. This is essentially your place in line to be paid back. So, you always want to try and be in first lien position


Payment Date: This is when the monthly/quarterly payments from the borrower are due.

Interest Rate: Your annual return on a loan. Your loan agreement should specify how often interest is to be paid (typically monthly).

Term: The length of the loan. Private notes can range from a month to many years. It just depends on your comfort level and what you’re looking for.


Learn more about returns and security from private notes in this blog addition.

Private Lending the Basics-Terms


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Private lending with your IRA


Private lending with self directed IRA's

How to lend with your IRA or other retirement plans…private lending with your IRA.


Private real estate notes are a great way to keep your retirement growing nice and steady without the roller coaster ride of the stock market.

But did you know you can fund one of these loans with retirement funds through a company that offers Self Directed IRA Plans?

Most large IRA companies only allow you to invest in stocks and bonds. Self-Directed plans, however, allow you to invest retirement funds in any investment the IRS allows.

This includes real estate and loans.

To invest in private notes using your retirement funds, you must set up an account with a company that offers the Self-Directed options.

Here is a list of some of the companies that offer Self-Directed plans:

  1. The Entrust Group
  2. Equity Trust
  3. Pensco
  4. New Direction IRA
  5. IRA Services Trust Company
  6. Midland Trust
  7. Mainstar Trust
  8. Vantage IRA’s

Of course, you can check the web for other local options, too.

Once you establish an account with one of these companies or another you feel comfortable with, you can start funding loans!

Our suggestion is to select two or three companies you can see yourself working with and shop them for fees and customer service.

Some companies charge just an annual fee, and some charge every time you create or payoff a loan. Other companies might charge you both fees. So, it’s smart to take a few hours and see what best matches your needs.

If you’re interested funding short-term loans (3 to 6-month loans) and have a funds moving back and forth, you might want to stay away from companies that charge larger fees per transaction.

On the other hand, if you’re more interested in long-term loans that go on for years, you probably want to find a cost structure that has a lower annual fee and a larger per transaction fee.

It’s truly up to you and what you’re comfortable with.

So, go check out a couple. Find the fees that match your goals and the customer service reps who will answer the phones and your questions.

If you have any questions on private lending with your IRA you can reach out to us through the contact us form and we would be glad to help.


What are private real estate notes?


Private lending with your IRA


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private notes done right

In our last post (Ways to make your private notes a lot more secure. Part 1) we discussed 5 ways to keep your private notes more secure.  In this post we are going to wrap up our conversation on this topic with the remainder of our top 10.

Private notes are a great way to earn above market interest rates and this is a few ways to keep them more secure and well protected.

6.  Check how committed your borrower is to their promises by asking them to put things in writing. That’s what a loan agreement is for—to spell out every term of the loan.  You will find a lot gets promised and don’t try to commit it to memory.

7.  Walk away if a borrower offers outrageous rates. If it’s over market rates, it’s probably a scam. Good borrowers don’t want to pay inflated rates. In fact, they want to pay and negotiate the lowest rate they can get.

8.  Always escrow funds for fix ups. That means you hold the renovation funds back at closing and release them later, as work is completed on the property. This will ensure the property value is reached by all the worked being completed as agreed.

9.  Ask for a borrower’s “story.” Learn about the good, the bad, and the ugly. This will build trust and prove if a borrower is trustworthy. If their story changes each time you talk to them, walk away. Don’t be talked into a bad loan relationship. Get all of your agreements in writing and fact check as much as you can.

10.  When someone needs to close a deal SUPER-fast (in hours or a day or two), run, don’t walk. This “emergency” to fund NOW will likely become a pattern and those loans will become a headache for you for years to come.  The borrowers will also likely want to skip steps that protect your money…there are too many loans out there to take on this extra risk.


If you have any questions on how to keep your loans as secure as possible please reach out to us on the Contact Us form.

Secret to better returns

Have a great day.



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private notes done right

Ways to make your private notes a lot more secure. Part 1

Putting money to work in private notes is a savvy, safe way to invest your money. But like all investments, there are there are a few ways to make them even more secure.  Please understand that the fees and costs of these items should always be picked up by the lender.  These costs are a lot less than they would pay with a traditional lender.

Here are 1-5 of our top 10:

  1. Always insist upon using a third party to create your closing documents. Have your attorney complete or review all the documents (this should be covered by the borrower and not you). Do NOT let the borrower write them for you.
  2. Hire an appraiser or local realtor to valuate each property to so you know the real current market value.  Do put all your trust in the valuation provided by the borrower. It doesn’t mean they’re trying to lie. They simply might not know the value of the property.  The loan to value is key to keeping your money secured.
  3. Require each loan be closed, insured, and recorded by a title company and or attorneys office. If a borrower claims closing/recording through title is a waste of time or money, they are not the type of borrower to receive your money!
  4. Always pay for title insurance and request first lien position. First lien position will ensure you get paid back first, before anyone else.  If you just order title and don’t request to be in 1st lien position you may end up in a jr lien position.
  5. Always verify wire instructions verbally with your title company to avoid fraudulent activity. Do this each time you send or receive a wire. Wire fraud has increased and always take the time to protect your money.

Next up Ways to make your private notes a lot more secure. Part 2. 6-10

Private notes secured

If you have questions or what to learn more about private real estate lending reach out to us today through the Contact Us form.


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