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Trust Deeds and Real Estate Investing. Disclaimer/Disclosure. - PowerPoint PPT Presentation
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Trust Deeds and Real Estate
Investing
Disclaimer/Disclosure
Money invested through a mortgage broker is not guaranteed to earn any interest or return and is not insured. Before investing, investors must be provided applicable disclosures. Past performance does not guarantee future results or success. Consolidated
requires a $20,000 minimum investment.
Nevada MLD#284 – Consolidated Mortgage, LLC.
1291 Galleria Drive, Suite 220
Henderson, NV 89014
P. 702.739.9090/877.739.9094
• Founded in 1977 • Over $2 Billion in real estate
transactions closed• Over $500 Million under
management
Company Overview
What is a Trust Deed / Mortgage?
Definition of Trust Deed
Private Notes - Public Deeds
1st Trust Deeds Only
Types of Trust Deeds
• Land Acquisition
• Land Development
• Construction
• Bridge
Why Borrow from Consolidated?
Speed
Flexibility
The Art of Choosing Good Loans
• 5 C’s of Lending– Collateral– Capacity to borrow– Character of the borrower– Capital – Conditions of the market
• Fact Sheets
Risks Involved in Trust Deed Investing
• Borrower Defaults
• Illiquid or Non-liquid
• No tax benefits for non-
qualified funds
Why does a Trust Deed belong in your portfolio?
Is your portfolio diversified?
Growth vs. Income(Example: 100 – Age = Growth Percent)
Fixed Income Bonds vs. Trust Deeds
• Backed by company issuing bond
• Backed by borrower and collateral (real estate)
• Secondary market
• Interest paid monthly, quarterly, semi-annually, annually
• Maturity Dates vary
• Yield is traditionally
6 – 8%
• No Secondary market
• Interest paid monthly
• Maturity dates typically are 12 months
• Yield is traditionally 12% and higher
Fixed Income Annuity vs. Trust Deeds
• Backed by Insurance Company
• Backed by borrower and collateral (real estate)
• Typically interest paid annually
• Maturity – Date of death
• Yield is traditionally3 – 5%
• Tax deferred
• Interest paid monthly
• Maturity dates typically 12 months
• Yield is traditionally 12% and higher
• Tax deferred if invested with IRA
Why is there an opportunity to invest?
• State of the Market– Credit Crunch– Real Estate Bubble
• State of the Southwest– Increasing Population– Increasing Employment
Clark County Population
Southwest Regional Employment
Local Hot Spots – Las Vegas
Capital: $8.4 Billion
Rooms: 6,650
Estimated Completion: 2009
This construction project is the most expensive privately funded in U.S. History
City Center
Echelon PlaceCapital: $1.9 Billion
Rooms: 2,045 suites
Estimated Completion: 2008
This project will make Wynn Las Vegas the fifth largest hotel in the world.
The Plaza
Capital: $4.8 Billion
Rooms: 4,713 Estimated Completion: 2010
The Echelon will be divided into five partially separated towers.
Capital: $5+ Billion
Rooms: 4,100
Estimated Completion: 2011
Current plans are to create a replica of the ultra luxurious New York namesake.
Encore
The Palazzo
Palms Place
Capital: $1.6 Billion
Rooms: 3,025 suites
Opened: Jan. 2008
Capital: $650 Million Expansion
Rooms: 347 Condos
Opened: Feb. 2008
Why Lend in Today’s Market?
Have We Hit Bottom?• Property Values• Land, Development and Construction
• Lending Opportunities• Credit Crunch • Bank Quality Loans &
Borrowers• Lending at the bottom
Example
2006 Value $5,000,000.00
2008 Value $3,000,000.00
2008 Loan $1,800,000.00
2008 LTV 60%
Would you make this loan?????
What types of funds can I use to invest?
• Money in checking and/or savings account
• Roth IRA or IRA• Corporate Funds
(LLC, Inc, etc…)
Benefits of Trust Deed Investing
• Secured by Real Property• Short Term Commitment• Double Digit Annual Returns• Interest Paid Monthly• Portfolio Diversification
Thank you for attending
Q & A