Saturday, April 12, 2014

Something Different

I am going to post my regular weekend report tomorrow morning as usual, but wanted to talk about real estate investing, and in particular investing in what is known as First Trust Deed investments.  As many already know, there are a number of ways to invest in real estate.

  • Buy a home for your family,, and as a long term investment. I own one
  • Buy a rental property in a different market than you live in with enough down that it cash flows for you, as part of your wealth building strategy. Letting renters help you build this wealth. I own one.
  • Get into the home flipping game.  I stayed away as it takes a eye for value, contractors skill in sizing up repairs, and a lot of cash flow and courage to make money.  Oh and your timing needs to be right.  In CA this market is a loser as of the first quarter.
  • Own a REIT, or get in a real estate pool.  I stayed away as all I own is a promise, and if something goes wrong, well get in line as when you read the fine print you may find your place in line may not allow you a recovery.
  • The last one I want to discuss, as it is where I hold most of my wealth, even more than the stock market, is in first Trust Deeds.  I have owned these since 2006, as a diversification, and as a low volatility way to make above average returns, hold actual first in line title to the property in case of a default by the borrower, and enough equity in the property to return your investment to you if you must take the property from the borrower.  Even in 2008 when the real estate market seized up, in nearly every market a properly underwritten loan paid off for these lenders.  Personally, I have suffered no loss, and only had to adjust interest payment for the borrower during that time so they could cash flow and stay current.  I am still in them today. 
Being first in line, with properly underwritten investments is the key, because not all First Trust Deed loans are alike.
    • There are the fix and flip loans to "investors"
    • There are loans to buy out of foreclosures
    • There are the credit repair loans to dinged homeowners with a lot of equity using their balance sheet to repair their ratios and wait out FICO
    • Commercial loans
    • The new construction market, with professional borrowers.
I give you this and my background on First Trust Deeds, as I view them as an essential part of your wealth strategy, wanted to introduce a company that I consult for, the owner of which is a friend of mine.  (Disclosure, I am not a broker and do not sell these loans, nor will I paid on these loans.  I work for all three of his companies, not just this one)

The company is Ignite Funding  They are a private lender to the new construction building industry, (in business since 1995) and they are growing very fast because they are making their clients a lot of money.  In fact they have funded nearly 150 million in loans at an average return for their investors of 10.9% and NO losses in the last three years.  In 2014, they are growing at a record pace again, of over 30%.

The reason is they are dealing with professional builders, in growing markets, with nice homes, and your investment is secured by the real estate your investment is tied to.  You are the bank.  They protect their investors with 30-40% equity on average, and keep the loans to a year or less in most cases to further reduce investor risks in a now fast changing investment value environment.

But let me allow them to tell you their story.  Please go to
and hear more.  Sign up so they can verify you are suitable to make this investment, and that they can legally send you future loans to review and consider.  They currently have over 1250 active investors, are servicing over $53 million in active loans, and will write 7-8 million in new loans every month this year.  Their loans are in such demand that they subscribe within 2-3 days of becoming available.  

Also, they will never ask you to buy a product, never personally hold your money (always through escrow), and the borrower pays all fees on any loan you would invest into. you'll like these guys, 94% of investors reinvest.  Thanks for letting me pitch these guys.

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