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What Size Trust Deed Investment is Right for You?

You may be wondering what size or amount of trust deed you should be looking for to begin your next investment.

Always consider  lending on multiple trust deeds at the same time. Diversify your portfolio between several different loans to reduce risk and balance your return.

Statistically speaking,  not all of your borrowers will be late at any one time.  If one of your borrowers even defaults, by diversifying, that one loan will represent only a fraction of your monthly trust deed portfolio income.

One method is  to take the portion of your nest egg allocated for trust deed investments and divide it by at least 5 or 10, depending on the total amount.

For example, if you have $200,000 of your portfolio allocated to trust deeds, you should be targeting trust deed investments between $20,000 and $40,000 or less.

Another good rule of thumb for smaller amounts is to restrict a single trust deed to no more than 25% of your portfolio. If you have $50,000 that you would like to put into trust deeds, split it up into three or four trust deeds to balance out your risk.

Of course,  your risk is already extremely low if each trust deed you purchase has a low loan-to-value ratio, but spreading your funds over several different trust deeds makes your risk drop even more!

Call toll free now at 1-213-437-6379 for more information.