trust deed investing right for me?
Trust deed investing
is not for everyone. Minimum investment requirements will
vary depending on the trust deed, but as a rule the entry
requirements are higher than for most other investments. Ask
yourself this question: Am I comfortable committing substantial
assets to an investment for at least a period of one year?
If you answer yes, then trust deeds may be suitable for you.
We can review our investor accreditation standards with you
and discuss whether trust deeds are consistent with your investment
is the return potential for trust deeds?*
Historically, our net returns for our investors have ranged
from 9% to 11% per year. By comparison, stocks have returned
about 8% over the last three years (2005-2007), and 10.4%
over the last 10. Bonds meanwhile have averaged 4.56% and
5.97% over the same periods. Returns also vary depending on
whether you invest in a specific loan or in a mortgage fund,
where diversification affords less volatility and reinvestment
are the potential risks of trust deed investing?
No investment is entirely risk free and in the case of trust
deeds, real estate values may fluctuate and borrowers on occasion
may default for a number of reasons, which may potentially
impair the timing of an investor’s cash flows. But good
underwriters like Rama Capital Partners and Athas Capital
Group can effectively manage those risks with their strong
knowledge of the market, rigorous underwriting policies and
sound business judgement.
also varies among different types of trust deeds. Rama Capital
Partners makes loans secured by first trust deeds only. A
lender holding a first deed of trust is paid off first if
the borrower should default and the property must be sold
to satisfy the loan. Lenders in second position are paid next,
and therefore face potentially more risk.
does Rama Capital Partners manage risks?
Risk can be mitigated. A trust deed investment is only as
secure as the underlying loan, which is a function of the
strength of the underwriter. As the credit evaluator of each
of its loans, Rama Capital Partners represents the investor
to ensure all foreseeable potential risks of the investment
Our strict underwriting standards and awareness of the market
are your insurance against potential risk.
the following factors are the fundamental drivers in the Rama
maximum loan-to value ratio, depending on the property,
which is more conservative than the industry averages.
third-party, independant appraisers who are experts in
their geographic area and property type.
stringent due-dilligence review process, including a seasoned
investment committee that reviews all loans.
our inception, our investors have not incurred any losses
on any investment that we have underwritten, making Rama Capital
Partners the premier partner in trust deed investing.
financial data - Bloomberg.