Sandstone Capital has unique advantages and core competencies. Unlike many of its competitors, Sandstone has a dedicated team of property managers and acquisition specialists through its affiliate, Sandstone Properties. In the event that a default warrants foreclosure, Sandstone has the ability to make timely, informed, and capital protective decisions based upon its years of experience and expertise in the acquisitions and real estate management space.
What sets us apart as a company is that we don’t just lend money, we lend our expertise. We pride ourselves on our ability to identify & evaluate the best opportunities that fit our clients individual needs
Joseph A. Pope — COO
A Trust Deed investment is where an investor provides a loan to a borrower, which is secured by the Deed of Trust that collateralizes the real property. In other words, the investor acts as the lender providing the capital to a borrower in exchange for first trust deed position in the property during the length of the loan. These loans tend to be relatively short-term loans that can last from 1 to 5 years in length.
Investors receive monthly interest payments on their invested capital. These interest payments tend to be higher when compared to other fixed income securities like government bonds.
Trust deed investments currently yield from 8% to 12% annually, depending on the property, borrower, and market competition.
We believe that diversifying your investment is the best route to take in order to reduce your overall risk. By this we mean dividing your investment funds into different Trust Deeds. This way, if a borrower does not pay on time, your cash flow will not be as affected as it would if you invested all your funds into one Trust Deed.
The difference between the two is the priority of the lien based on the date the Trust Deed is recorded. For example, if someone holds the Second Trust Deed position, they will be paid after the First Trust Deed is paid in full. Second trust deeds usually have higher interest rates because it is a higher-risk loan for the lender since they will be paid only after the first lien is paid off.
There are several reasons why a borrower would use a private money lender. Some of the reasons may include:
LTV, or, Loan to Value is the ratio between the mortgage loan and the value of the real estate which is pledged as security (expressed as a percentage). An example of the calculation would be:
LTV (Loan to Value) = 36.8% ($250,000 divided by $680,000)
36.8% is the loan expressed as a percentage of the property value. The lower the LTV ratio is, the lower the lending risk because the protective equity on the property increases as the LTV decreases.
Our minimum investment amount is $50,000.
You have access to all the information we compile in our due diligence. Whether this is the Preliminary Title Report, property appraisal, credit report, borrower application, or any other documents, we strive to make this process as transparent as possible for you.