Trust deed investing is investing in notes that are secured by real estate. Often investors and real estate professionals use a broker like Murk Investments to find capital to fund the purchase of a property. The funds used to purchase the property are provided by other passive investors. This kind of investing is an attractive vehicle for high net-worth individuals seeking to diversify their portfolios.

To fund a loan, Murk Investments sources other passive investor’s capital to create the loan. The passive investor’s interest is declared on a note and dead of trust. Often there is more than one passive investor funding a loan, this is called fractionalizing. The deed of trust is then secured by real property. This type of security gives investors protection in the event the borrower defaults on the loan. In this situation, the investors and broker can foreclose on the property and attempt to sell to recoup their investment.

Once funds are dispersed through an escrow, the borrower of the loan will make scheduled interest payments to the investors. Additionally, the borrower pays points to the broker and investors. Points are charged generally 1% – 4% of the loan amount and are paid immediately by the borrower.

Almost all hard money loans are balloon payments. This means at the end of the term; the borrower must repay the loan amount in full plus any outstanding interest and costs previously agreed upon.

At Murk Investments, we are local to the San Diego area and are comfortable working in this market better than a national or regional lender. We lend on properties in most San Diego markets. One of the most important factors we look at is the cash the investor is bringing into the deal. All of our loans fall under a 65% loan to cost. 
 
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