1st Trust Deed Investments and Real Estate Note Tips for 2013 Presented by SAM

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SAM introduces tips for the safest investments in 2013 by investing in 1st trust deeds & real estate notes.

Investing in Real Estate Notes

Investing in Real Estate Notes

If you are looking for low risk and high returns you should consider collateralized 1st Trust Deeds.

Many economists believe 2013 could be a very volatile year in the stock market due to higher taxes, health care costs, spending cuts, and high unemployment rates. According to Jim Stepanian the CEO of Summerlin Asset Management, “If you are looking for low risk and high returns you should consider collateralized 1st Trust Deeds.”

Are Trust Deeds Safe?

With any fixed-income investment, the first issue is always safety of principal. A trust deed is secured by an actual property, so the value of the piece of real estate determines the level of risk in a trust deed. A first trust deed (the focus of this article) is then the primary loan secured to a specific property.

Now that the market has seen most (hopefully all) of the real estate decline, most experts believe the risk for further decreases in real estate values has eased to the point at which trust deeds should be considered a great option for high income.

What To Look For

The key factor of a trust deed is the loan-to-value (LTV) ratio. The lower the LTV, the higher your level of security. Thus a trust deed secured by a property with a 40 percent LTV is considered far more secure than one at 75 percent LTV. This is where the investor owns the actual title, so the investor may have a well-secured investment which can throw off a significant amount of income.

Today, the market is seeing first trust deeds with LTVs between 50 and 60 percent, meaning the property in question would have to drop in value by half (from today’s prices) for there to be risk due to the value. That is a level of decline which has almost never occurred in history.

This is where SAM adds in a second layer of protection which is called a Buyout Agreement. It is a contract whereby the investor can get their money back if the borrower defaults on the real estate note. This is something unique and most trust deeds out there do not have this option, so the investor must ask for it. Adding a Buyout Agreement to an already safe trust deed makes it a perfect choice for those who are most concerned about safety of principal.

How Much Income Can The Investor Earn?

Based on the current lending and real estate environment, it is not unusual to find first trust deeds with yields of seven to 11 percent. Summerlin Asset Management has released to the public their supply of discounted Trust Deeds yielding 10-14% and offers management services as well.

Each trust deed is unique. Since each trust deed is a stand-alone investment, nothing can replace careful due diligence and research to understand the pros and cons of that specific trust deed.

SAM Says It's Time To Take Action!

SAM recommends speaking with someone who has experience managing trust deed investments to discover if a well-secured first trust deed paying around 10-14 percent might be a fit an investor.

Summerlin Asset Management AKA: SAM believes the best way to invest in real estate is to own the 1st position titled lien and not real property. If you have questions, Summerlin Asset Management can be reached at (928) 854-7747 or by visiting their website at http://www.investinsam.com

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Jim Stepanian

Shannon Derosby
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