Trust Deed Investing

The
Bayview Holdings LLC
Method
OF
TRUST DEED
INVESTING
?
© Private Banking All Rights Reserved.

Why Become A Private Lender?
Within the last 12 months, over a Trillion dollars
have been lost in the market.
Many folks have to start over just about when they
thought their retirement was safe.
Their 401K’s became “201K’s” or worse.
BAYVIEW HOLDINGS LLC

Huge companies have gone under, some over a
hundred years old and more will follow.
The national deficit is higher than anytime in
America’s history and will continue to climb for
years.

Unemployment has topped 10% in many states
and will escalate much higher before it stops.
Residential and commercial development has
come to a screeching halt and funding has dried
up even if the demand were present.

Invest Only In First Mortgages
A lot of private investors have ended up walking
away from properties with substantial equity
simply because they either got discouraged or
they ran out of liquid funds to keep the first
mortgage current.
Bayview Holdings LLC

Commercial vs. Residential
Mortgages
A good home loan is probably a safer investment
than a good commercial mortgage – but all of the
good residential mortgages are taken.
In contrast, the small commercial mortgage loan
market is a niche that gas been traditionally
neglected by the big banks.

Invest in Mortgages Secured by
Commercial Property
A first mortgage loan of only 65% to
loan-to-value to a strong and experienced
borrower with good credit secured by his small
office building, is a far safer investment than a
second mortgage loan of 80% loan-to-value to
an insolvent credit flake secured by his home

Don’t be Afraid to Invest in
Fractionalized Loans
When you invest in fractionalized loans, you can
invest in any size loan that is offered.
Therefore you can choose the safest deal from
among dozens of large and small loans.

Importance of Diversification
If you stubbornly insist on owning the entire loan
yourself, you may be tempted to invest in a lousy
loan simply because the loan is small.
After all, there aren’t a whole lot of $20,000 loans
floating around these days.

Importance of Having a
Qualified Borrower
Owning 10% of a $200,000 first mortgage to a $3
million net worth borrower with perfect credit
secured by a fully-leased strip center is probably a
far safer investment than $20,000 second
mortgage to some insolvent credit flake secured by
his home.

Control Your Risk Easily
Of course, you probably wouldn’t want to invest in
a fractionalized second mortgage for fear that one
of your partners may fail to pay his fair share of the
first mortgage payments.
Stick instead to first trust deeds, where any cash
call is likely to be modest.

Safety in Numbers
When you invest in fractionalized loans, you can
choose your trust deeds on the basis of safety, not
simply because they are small enough to own all
by yourself.

Diversify Your Trust Deed
Portfolio
If you invest your entire trust deed portfolio into a
single $90,000 loan, guess where the epicenter of
the next big earthquake is going to be?
The wise trust deed investor will instead diversify
his $90,000 portfolio among at least six different
first trust deeds.

Diversify Your Trust Deed
Portfolio
Even credit worthy borrowers occasionally fall a
few weeks behind in their payments from time-to-
time.
If this should happen to you, you’ll sleep better at
night if you have only $15,000 into the delinquent
loan and your other five loans are still performing.

Diversify Your Trust Deeds
by Region
Many old-time trust deed investors used to only
invest in trust deeds close to their home.
Then a lot of private investors in San Diego were
slaughtered when the naval base closed and both
Lockheed and Hughes left town.
And what if you lived in L.A. and had all of your
trust deeds there when the Northridge earthquake
hit?

The wise trust deed investor will own one deal in
Sacramento, one in San Jose, one in Fresno,
maybe two in L.A. and one in San Diego.
While an earthquake, plant closing, mudslide or
base closing might hurt one investment, the rest of
your trust deed portfolio could easily survive.

Diversify Your Borrowers
Even a great borrower can go off the deep end
after a divorce, so never make two loans to the
same borrower.
You should also pick borrowers in different
professions.

If you had made six loans to six medical doctors,
your portfolio might be in trouble right now.
Stay away from developers, Realtors and
mortgage brokers as borrowers.
The real estate cycle often forces these borrowers
to become unreliable.

Don’t Be Afraid to
Invest Long Term
Your mortgage broker can seldom compete
against a bank based solely on rate; but he can
often bring you a great borrower if can offer the
borrower a ten year loan.
Banks prefer to make only five year loans, and
these balloon payments often scare away good
borrowers.

Staggering Maturities
You can still maintain reasonable liquidity if you
stagger your maturities and spread your portfolio
out among six or more loans.
Statistically, the typical private money loan pays off
within five years.

Good Underwriting Practices
There is a common theme among these
recommendations.
1.Credit Quality
2.Capacity to Repay
3.Collateral
(the “Three C’s” of Underwriting)

The Importance of Diversification
If you want us to find you the safest possible deals,
your yield demands must be reasonable, and you
need to be flexible on location and term.
Always remember to diversify-diversify-diversify.

Invest in Trust Deeds Using Your
IRA or Retirement Account
We’ll help you move it to an administrator who will
allow you to invest your money into anything YOU
WANT, not what they want.

Invest in Trust Deeds Using Your
IRA or Retirement Account
It costs nothing to transfer but will take about 10
days.
Once it’s done alert us and we’ll get you into a
deal.
All your interest is tax free in a Roth and deferred
in any other plan.

Contact Us at:
877-696-2690
Al@BestBayareaWholesaleProperties4u.com
BestBayareaWholesaleProperties4U.net

Trust Deed Investing

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