Why invest in private mortgages?
Private mortgage investing, also known as trust deed investing has risk characteristics different from the stock market. The loans are short term. Because they aren’t equity investments the term of these loans is clearly defined, not open ended. On average, our loans repay within 6 months.
How much do these private mortgages yield?
Our mortgages typically yield 11-14% per year. However, the vast majority of the loans we make are 6-month loans with no monthly loan payments.
Why don’t your borrowers just go to a bank rather-than-pay you high interest rates?
The majority of our borrowers are bankable. However, they typically don’t go to the bank because either their closing timeframe or the property’s condition makes bank lending impossible.
Why are you comfortable making loans against properties that a bank wouldn’t lend against?
Because, unlike the vast majority of bankers, I’ve renovated and resold dozens of houses. I know what the works costs. I know where renovations run into problems.
