Residential Trust Deed Investments

With Prosperity Lending, you can invest in home mortgages through a type of investment called “residential trust deeds.” 

We are highly successful at placing self-employed real estate loans with niche lenders, but there are STILL circumstances where the loan cannot be placed due to lender rules that are not relevant to the borrower’s ability to repay.

We are fully set up to fund these loans through private lending for 1-4 unit properties in California—both for business-purpose use and consumer-purpose use.

We can handle these loans from beginning to end. This is not only beneficial for investors who want to see their money securely backed by real estate, it is also a benefit to the community in providing the liquidity that established and proven successful business owners need to be able to expand their operation in this unusual market.

Investor returns

As the investor, you get between 7% and 9% per year, with monthly payments, for a period that ranges between 1 to 5 years, and the collateral consists of a specific real estate property at a maximum of 65% of its value. In other words, if the property is worth $100,000, loans to it cannot be higher than $65,000, leaving a cushion in case of market downturns. 

This is a popular, time-tested way of investing and I am sure you have heard about this over the years.

It is called "Trust Deed" because in California and some other states, mortgages are perfected through a document called a Trust Deed. Unlike proper Mortgages, a Trust Deed allows you to sell the property and collect on your loan in about 4 months as opposed to a Mortgage where you need to wait at least a year and go through a court proceeding. 

Trust Deed Investing has traditionally been the business of what is referred to as "hard money lenders," because they get funds from investors to then lend out.  

Hard money vs. “soft money”

For years, I have brokered loans to my clients from "hard money" lenders.  

I have tried to avoid using hard money lenders for my clients and only resort to them where there was no other option because rates and fees tend to be high. 

We specialize in serving self-employed borrowers, and our mission is dual: help business owners grow, AND provide a safe high yield of return for investors. Both go hand in hand. 

For many years my dream was to create a "hard money" alternative that I call "soft money", whereby the borrower gets a fair deal, fees are not excessive and the investor providing the funds for the loan gets an above average return with increased safety and professional management of his/her monthly payments. 

But WAIT...as they used to say in informercials...there is more:

Most hard money lenders will never touch what is called a "consumer purpose loan." This is where the loan is not being used for a business project but it is used to finance a primary residence where the borrower will actually live.

Doing a "consumer purpose loan" requires more training, higher quality control and compliance, additional licenses and disclosures that most hard money lenders simply don't want to invest in.  

The advantage for the investor who funds a consumer purpose loan is that you get the extra safety of the property being a primary residence rather than a business property. Borrowers of primary residences are a safer bet.

In this market environment as of this writing, we are lending: 

• Short term business loans with a term that ranges from 1 to 3 years, and generally these pay 8% to 9% per year.

• For consumer purpose loans, in practice terms vary between 3 to 5 years, and get you between 7% to 8%. 

 Consumer purpose loans pay slightly less because: 1) they have a higher degree of safety, and 2) Federal & State Regulations limit the amounts that can be charged. The trade-off however is that you get a great and stable rate of return. 

Why would anyone use a "soft money" lender like us? Because financial institutions are not fond of independent business people. 

You have two extremes when seeking finance: A) you either have to provide a mountain of paperwork and comply with all their rules, which only a small segment of business owners are able to, or B) you resort to "hard money" and pay through the nose. 

Even if you have the mountain of paperwork to provide, a small and often immaterial technicality can get you disqualified. 

Up until this time, there was no in-between! But “Soft Money” is now in existence. :)

Make a great rate of return with our “Soft Money” loans

I would like to invite you to make a great rate of return with our soft money loans, and ALSO make a difference to the business community by providing your fellow business owners with a sound alternative to either extremely hard to qualify rules from banks or extremely high fees from regular hard money lenders. 

You can go short term, providing financing for a business-purpose real estate loan, or longer term, providing financing for a consumer-purpose loan.  

The administration of payments is handled by a licensed and experienced third party servicer.  

The Note and Loan Package that you get when the loan closes is a financial instrument that can be hypothecated (used as collateral to get a loan) or sold on the Note Secondary Market—this is in case you may need the liquidity while the loan is still performing and you cannot wait until maturity.  

I would like to invite you to participate in our Soft Money Trust Deed Investment program.

Please email me at info@prosperitylending.us for more information.