To be fair, Trust Deed Investing isn’t always incredibly attractive. During the recent real estate boom years Trust Deed Investing wasn’t the vehicle of choice for sophisticated investors. At times when credit is plentiful it’s far more difficult for private investors to make or invest in loans that are attractive. Like any product, when supply outweighs demand it drives down prices and creates an unfavorable environment for the product supplier and a favorable environment for the consumer. In 2005, almost any consumer could find credit from a bank or private investor. In fact, lenders were competing for the opportunity to extend credit to borrowers. The result was that loan terms were weighted heavily in favor of borrowers, thus creating an unattractive situation for experienced lenders.

 

In contrast, in today’s economy, credit is extremely scarce. Borrowers that can find credit are generally more willing to allow lenders to name the terms at which they’re willing to lend, which means that the quality of loans being made is exponentially better than those made in 2005. Lenders and investors that are participating in Trust Deed Investing now have the ability to add only the most conservative loans to their portfolio and reap the benefits of having their capital in such high demand. Here are just some of the benefits of Trust Deed Investing in today's economy: