There is no mystery to trust deeds. They work much like other fixed income investments, such as bonds, with a few key differences. When you purchase a bond, you’re loaning money to a corporation or government. In exchange, you receive interest income throughout the term of the loan and repayment of principal at maturity. The loan is backed by the corporation’s assets or the full faith and credit of the government.

When you invest in a trust deed, you’re making a mortgage loan collateralized by the borrower’s assets and more specifically, their real property. This could be anything from a single family residence to an apartment building or office building. In return, you receive regular interest payments throughout the term of the loan and repayment of principal at maturity. Rama Capital Partners serves as liaison between the borrower and lender and ensures that the terms of the loan are fulfilled.

The chief difference between trust deeds and traditional bonds is that most fixed-income investments are misnamed. Bond markets can be highly volatile, seesawing with interest rates and other economic factors. Trust deed investors suffer no such uncertainty. The interest rate is typically fixed, meaning you get a consistent rate of return and have full transparency into what you are investing. Furthermore, our private loans typically boast above market rates of return with measurably less risk.