Successful investors change with the market. Managing investment risk in the real estate category can be realized by avoiding direct purchase of real estate and choosing to invest in trust deeds.
Property values have dropped approximately 30% or more in value from their recent highs. This is why smart investors are snapping up properties at what many consider a historic opportunistic time. Our investors would rather be lenders than owners of property at this time.
The direct property investor is at 100% risk of his investment. On the other hand, the trust deed investor has protective equity cushion above and beyond his investment. This is because the maximum amount we will loan is 65% of the purchase price or the appraisal, whichever is less.
Here is an example:
Mr. A purchased a house for $350,000. If he borrowed from us he would have a down payment of $107,500 (35% of $350,000). He can borrow up to $227,500 (65% of $350,000).
Assume that later, the value on the property drops 10% or $35,000. Mr. A has a paper loss of $35,000.
Now let’s consider the lender’s position. The Lender is receiving a monthly interest payment as contracted for. The lender still has the entire investment protected and the only change is the protective equity has changed from $107,500 to $87,500 ($315,000-$227,500).
Summary: Mr. A has a paper loss of $35,000 and the lender (You) are still getting your monthly interest payment and the property is still worth more than your investment. Who would you rather be?
The property investor has a loss, but the trust deed investor has cash flow and no loss if there is a downward adjustment in real estate values. The investor/borrower is obligated to pay and in the event the trust deed holder has to foreclose on the property to collect on their loan. There is still an equity cushion to protect against the loss. You get your return and the equity cushion to protect repayment of your principal.
Are you looking for a reasonable return on your money? Do you want to live on your earnings and not touch your principal? Are you happy with current bank C.D. rates of 1.25% per annum or less? Does your stomach sour with every gyration of the stock market?
You can do what prudent investors have been doing for decades, investing in Trust Deeds that provide returns of 7-8% per annum on their investment paid monthly with Real Estate equity to protect their investment.
Very few investments have that quality, monetary returns paid monthly and security of principal.
HOA’s sole purpose is to work with investors who would like to invest in EQUITY. This is done through First and Second Trust Deeds.
We are looking for investments of $50,000 or more from qualified individuals or retirement funds. We may use funds from 1-4 investors for each Trust Deed.
Each investors interest is recorded on the Trust Deed and you receive the following documents on your investment;
Recorded Trust Deed, Title Insurance Policy, Note signed by the borrower, Fire insurance policy, RE 851 with specifics of the transaction, Servicing Agreement between you and our servicing company.
Formed in 1981 and incorporated in 1984, Computer Mortgage Corporation is a real estate investment firm that focuses on real estate finance and investments in California. Computer Mortgage Corporation (CMC) combines practical real estate finance experience with creative solutions that are based on solid risk based fundamental principles that benefit our investors.
With over more than 75 years of combined experience, thousands of transactions, CMC’s officers represent varied disciplines (including accounting, Federal Real Estate Taxation, Brokerage, retail, real estate development, finance and syndication) and together give CMC a different perspective than other real estate investment firms.
CMC operates in the San Fernando Valley with offices in the West Valley and is licensed to do business throughout California. You can also learn more about us by visiting our website at www.computer-mortgage.com
For your free copy of Real Estate Trust Deed Investments-What you should know http://dre.ca.gov/pdf_docs/re35.pdf
Contact us for more information, see our website.
If you would like a free consultation, please call us today at 1-800-993-4199 No obligation or email us at HOA.