Most often, trust deed investments come in the form of new loans that a company like MMG Capital originates (makes). In other words, investors that buy or participate in trust deed investments are essentially lenders. By investing in a trust deed (loan) you’re lending your money to a borrower that has agreed to pay you a certain rate of return for the right to use your money for a period of time. In order to ensure that they make good on that promise to return your money to you with interest the loan is secured by real estate (or in some cases another valuable asset). If the borrower breaches their contract to repay, the lender or investor has certain rights with regard to that security (collateral) and can utilize it to recoup their investment.

 

Sources for trust deed investments are mortgage and real estate brokers, investment firms, banks, and individual investors.