INVESTORS
We don’t just lend money, we lend our expertise.
PROGRAM HIGHLIGHTS
Most loans are 1 to 3 years
Equity protected by reduced LTV’s
All loans secured by California real estate
Fractional participation allowed
High income return
Minimum $50,000 investment
Ability to seize collateral through non-judicial foreclosure
Dedicated in-house underwriting and servicing department
Sandstone Competitive Advantage
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
FREQUENTLY ASKED QUESTIONS
- What is a trust deed investment?
- How can I make money investing in trust deeds?
- What types of percentages do these investments yield?
- Should I invest all of my money into one Trust Deed?
- What is the difference between a “First“ and “Second“ Trust Deed investment?
- Why would a borrower pay higher interest rates for their loan when banks offer lower rates?
- What does LTV mean and why is it important?
- What is the minimum investment amount?
- What information is available for me to review when deciding if I want to invest in a Trust Deed?
- How can I get started?
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:
- Borrower is a savvy real estate investor who needs the money quickly and is willing to pay higher interest for a short term loan
- Borrower may have personal issues that prevents them from obtaining a bank loan
- Borrower needs the money faster than a bank can process their loan
- Borrower’s credit score may be unacceptable according to bank standards, even though they have good character
- Borrower may not have sufficient W2 income
- Borrower has had a past bankruptcy or adverse credit history
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:
- Loan = $250,000
- Value= $680,000
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.
When you are ready to invest or have more questions, give Sandstone Capital a call at (310) 393-9000 ex. 104 to speak to an Investment Associate. If you prefer to reach out by email, you may do so by contacting us at info@sandstonecapital.net.
