200012 Lecture Notes - Lecture 12: Property Law, Endangerment, Property Insurance

• School: UWS
• Department: University of Western Sydney
• Course: 200012
• Professor: anon

Document Summary

Investors who are searching for juicy yields sometimes turn to the real estate sector in particular, trust deeds. In trust deed investing, the investor lends money to a developer working on a real estate project. The investor"s name goes on the deed of trust, as the lender. The investor collects interest on his loan; when the project is finished his principal is returned to him in full. A trust deed broker usually facilitates the deal. Banks are often reluctant to lend to certain types of developments, such as mid-size commercial projects too small for the big lenders, too big for the small ones or developers with poor track records or too many loans. Cautious lenders may also move too slowly for developers up against a tight deadline for commencing or completing a project. So these developers are often in a bit of a crunch. For these reasons, trust deed investors may often expect high-interest rates on their money.