Trust Deed Basics
A trust deed, or deed of trust, is a security instrument for real estate loans.  The details of the loan are spelled out in a separate promissory note, and the trust deed is recorded at the County Recorder's Office.  The trust deed serves legal notice to the world that the subject property is pledged to secure a loan.  It also provides for a rapid method of foreclosure should a borrower default on a loan. 

Private Investor Loans, Inc. operates in a niche lending money from private investors to real estate professionals seeking loans for purchasing or developing commercial property, raw land and other real estate.  All loans are secured by trust deeds and offered to investors who seek a secured investment that pays more than bank rates.

The security of the loan is based on its loan-to-value (LTV) ratio, and on the recording of the trust deed  in a 1st or 2nd position lien on the property.   The lower the LTV, the more cushion investors are provided against a drop in real estate values.  For example, the value of a property with a 50% LTV loan would have to drop in half before an investor would lose a single penny of principal if a borrower were to default.  Recording the trust deed in a 1st or 2nd position establishes our priority on the property in case of foreclosure.

Advantages of Trust Deeds
Trust deeds offer the following advantages as investments:
1.  Pays out interest monthly.
2.  Interest rates paid are generally higher than bank rates.
3.  Notes are liquid and can be sold or traded.
4.  Investors can borrow against the note, using it as security.
5.  Security of trust deed generally increases with time as the property appreciates, providing an even lower LTV.  

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California Dept. of Real Estate, real estate broker #01294813