Trust Deed investment

[ER59]

I am thinking of investing with http://www.thenorrisgroup.com
Sounds very attractive...
Any one has any experience with them or Trust Deed investments?

[SeanO]

Re: Trust Deed investment

Yes, I've been investing with them for about a year and am very happy. I've come to know Bruce Norris personally as we both speak regularly to real estate investment groups in California. He and I also travelled to Washington DC to try to convince Fannie and HUD to better support individual real estate investors. Everyone should do their own due diligence, but I absolutely trust him, and I don't give my trust easily. Those that have heard me speak will tell you I also rarely give endorsements. Funny the question should be asked here on iTulip, because Eric (iTulip) and Bruce are two of the only people I regularly endorse without hesitation.

[thriftyandboringinohio]

Re: Trust Deed investment

I have a very similar investment. It pays me exactly the rate mentioned (12%) and works the same way in all the practical aspects ( I lent all the money to buy a non-owner occupied 2-unit home; I hold a first mortgage against the real estate with the ability to foreclose; a third party trustee is involved to keep it all IRA eligible). I found my property manager myself, and none of the documents in my investment is called a "deed of trust".

It's worked well for me, I've been paid all my interest for two years now and I see no real risk of suddenly owning and operating the damn building myself. To me that's good money, 12 percent tax-sheltered for a fully passive investment.

[SeanO]

Re: Trust Deed investment

Whether or not a deed of trust is involved depends on whether you are lending in a title theory or lien theory state. In a title theory state the lender holds title to the property through a deed of trust with the power to sell, typically allowing "non-judicial" foreclosure. In a lien theory state the deed stays with the owner and the lender places a lien on the property, which generally requires court involvement upon a dispute (a "judicial" foreclosure). See map here: http://title.grabois.com/. Personally I prefer lending in non-judicial states, especially with how mucked up the foreclosure process is in most judicial states these days. But while the foreclosure process often takes longer in a judicial, lien theory, state, the protection of your interest in the property should be fairly similar in the end so it isn't a huge deal.

[thriftyandboringinohio]

Re: Trust Deed investment

Thanks SeanO. I looked at your map and see Ohio is a lien theory state.
To my thinking, ease of foreclosure is a secondary consideration. If I get myself into that spot, I've failed as an investor by picking a lousy property manager.
Still, I insist on the ability to foreclose to prevent my investment going to zero in a worst-case scenario.