Loan Investors Area

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Information For New California Trust Deed Investors

(This page is for Investor-Lenders only — if you are looking for a hard money loan on your property, please see our Hard Money Loans page for borrowers).

Thank you for your interest regarding California trust deed investments from Augusta Financial Inc . If you are new to investing in CA Trust Deeds, please take a moment to review the following important information.

Trust Deed Investors Summary Notes

1. We broker hard money loans to individual investors interested in making private real estate loans to our borrowers on different property types in California, and occasionally elsewhere. A Note and 1st, 2nd, or 3rd Deed of Trust secure these loans.
2. We are not a financial source or resource for real estate investors looking for advance private funding for foreclosure sale property purchases or discounted real estate for sale, nor for venture capital funding for speculative real estate investing. A valid purchase contract signed by both buyer and seller is required for consideration of a hard money purchase loan.
3. The majority of our borrower clients are individual property owners with 25% or more equity or stake in real estate, but have poor credit or non-documented income and cannot qualify for conventional financing. In some cases, our clients are less credit challenged but are seeking private money as a more expedient route to their available equity and require faster turnaround than conventional lenders can provide. In other cases, our private money loans are used for commercial bridge money for different purposes.
4. ALL hard money loans must comply with state and federal anti-predatory lending laws as they relate to owner-occupied property and covered loan limits. Also, and in accordance with real estate law as it relates to owner-occupied property loans, we do not arrange loans for clients who do not have the ability to repay the obligation, nor will we broker loans that are not in the best interest of the client, regardless of the investor's willingness to lend, as we have primary fiduciary responsibility under the law to the client.
5. The properties we broker trust deed loans on are owner-occupied homes, 2nd homes, vacation properties, raw and improved land, and commercial real estate, including retail, mixed-use, offices, apartments, and industrial properties. Our loans include purchase money loans, refinance loans, construction loans, and rehab ("fix-and-flip") loans on CA real estate. We do not broker unsecured business loans or personal loans.
6. Title to the properties we arrange loans for may be vested in individuals, LLCs, corporations, or trusts.
7. We are not a "Note Broker" — we do not buy or sell Notes on CA real estate.
8. Augusta Financial Inc is NOT an investment company or Real Estate Investment Trust — we are a CA licensed real estate mortgage broker that originates privately funded real estate loans in addition to a wide variety of other conventional and non-conventional residential and commercial real estate loans — primarily in California. We also perform traditional real estate buyer and seller services within Los Angeles and Ventura Counties.
9. We do not "pool" investors or investments. We do not produce any literature or a prospectus on our services or trust deed investments, nor do we act as a property information service, your investment advisor, your legal counsel, or as instructors with regards to real estate trust deed investments. If you entirely unfamiliar with investing in real estate trust deeds, you may wish to instead consider investing in a publicly traded Real Estate Investment Trust ("REIT), available from any number of investment brokers, or otherwise wait to invest until you have the necessary education and legal advice you'll need in order to successfully delve into investing in trust deeds, as these are not a "no-risk" investment.

General information regarding CA real estate lending, including most applicable CA real estate law can be found at the CA Dept. of Real Estate's website: http://www.dre.ca.gov, and predatory lending law: http://www.dre.ca.gov/predlaw.htm. We recommend that new investors still retain a competent and experienced real estate attorney prior to investing in CA trust deeds.

As potential borrowers inquire about hard money loans against their property, we contact investors in certain areas and present the details of the loan transaction for their immediate consideration. We do not guarantee a minimum of trust deed investment opportunities to you, nor do we guarantee the performance of any borrower in meeting his or her obligations under your Note and Deed of Trust. You may have to file the legal paperwork and foreclose on a property in order to recover your investment in the event of a borrower's default on your loan. In the event that you select a 2nd or 3rd Trust Deed position, you may have to "cure" the notes in front of yours if the borrower defaults on superior liens in order to protect your investment. A fundamental understanding of "debt service" is important if you make subordinate loans in 2nd or 3rd position.

As a hard money broker, we provide you with the borrower's current 1003 loan application, current credit report (if required), and preliminary title report if using our preferred title company, as well as all relevant details of the transaction to you for your consideration. If you require an appraisal, we can also arrange for this service at the borrower's expense.

Our long-standing private real estate investors usually perform their own due diligence and consideration, draw their own loan docs, and service their own loans. If you are a new investor, we request that we service your loan for a low monthly fee, draw loan documents (at the borrower's expense), and process your transaction through our preferred escrow and title vendor, TICOR. In the event that foreclosure is required, we will handle assignment of a reconveyance firm to handle all necessary services in that regard at the borrower's expense.

The investors we primarily use to fund our loans are typically high-wealth individuals with broad experience in real estate lending and investment, and are capable of making a commitment to lend (or not) within a matter of hours or a day or two. We will, in some cases, use newer or first-time investors with smaller amounts to invest, but we are highly reluctant to use investors who need many days or weeks to scrutinize a potential investment before making a decision to lend, as our borrowers are usually in need of immediate funds and will go elsewhere if there are long delays in pre-approving a hard money loan application. The exception to this is when an appraised value is questionable and/or a more thorough review of the property is warranted, as is the case with some rural, unique, very expensive, or mixed-use real estate.

Our general minimum brokered hard money loan for "owner-occupied" residential property is $50,000, though loan amounts less than $50,000 for owner-occupied property will be considered on a case-by-case basis, with an appropriate and lawful commission fee paid to us. The exception to this minimum investment standard is for investment property, commercial, and land transactions, which allow for substantially higher points and interest. Our minimum brokered loan for these property types is $25,000.

You may submit your criteria for your preferred investments at my webpage here:
http://cal-lending.com/loan-investors/investors-form.html. Any additional interest in specific investment and/or property types, LTV/CLTVs, demographic areas of interest, etc, may be made in the "Comments" section.

Trust Deed investing is not the exclusive niche market it used to be. As the consumer public is fast becoming aware of the existence of privately funded real estate loans in conjunction with super-appreciated California property values, competition in this area of niche lending is increasing rapidly. We are beginning to see "shoppers" looking for the lowest interest rates, points, and prepayment penalties for hard money loans, regardless of how poor some of these individual's credit and other qualifying factors or circumstances may be. Conventional subprime lending has also become more liberal, and thus more competitive in areas where private money used to dominate.

Anti-predatory lending laws also severely limit the interest rate and overall fees allowed on owner-occupied, privately funded property loans of $250,000 or less. The days of private money interest rates at 15% returns and 10-point fees, at least for owner-occupied real estate loans under $250,000, are long gone.

As such, you can secure more real estate investment opportunities with a lower required interest rate return and points charged. Likewise, the higher loan-to-value percentageyou are willing to loan against the properties you wish to lend on may also earn you more transaction opportunities, though there is an increased risk to you in the event of the borrower's default or declining market conditions. Finally, your willingness to consider less desirable property types, such as manufactured or modular homes (permanently attached to a foundation), raw and remote land parcels, unfinished construction, etc., will also open more investment opportunities, though, again, there is a higher risk in lending on these properties versus more conventional types.

All loans MUST meet state and federal regulations for Section 32, AB489, and any/all other federal and state-level predatory lending regulations. Properties within the cities of Los Angeles and Oakland also have additional regulations and compliance that supercede state laws. As a broker, we are NOT your legal counsel or advisor as to the specifics of any applicable regulations applying to private mortgage lending in CA -- it is strongly recommended that you retain legal counsel and familiarize yourself with all laws and regulations PRIOR to investing in CA trust deeds.

You should also NOT consider investing in trust deeds unless you have significant cash reserves available to protect your investment in the event of default and foreclosure.

Our broker fee for hard money loans vary from 1.00% to 5.00% depending on the transaction type and amount. Again, all loans must still comply with maximum APR lending laws. Monthly loan servicing is an extra fee charged to the investor.

Feel free to contact me directly at 1-800-644-8829 with any further questions or email me a completed Investor Inquiry Form to be added to our list of potential investors.

Regards,