General

Most loans are brought to CrowdTrustDeed by Sponsors who are originating or who have originated a loan. Borrowers are typically real estate investors that need extra cash and do not qualify for traditional bank loans. Once CrowdTrustDeed qualifies the Sponsor and the property, we then seek outside investors who might want to participate in the loan. Typical investment amounts are in increments of $20k, but may be larger depending upon the loan amount.

For example, if you decide to invest $100,000 in a 12% Interest OnlyTrust Deed with a 10.5% payment and a term of 36 months, you would receive a monthly check in the amount of $875.00 for 36 months with payment of your $100,000 principal investment at the end of the loan term.

CrowdTrustDeed investors can pick and choose the loans they wish to participate in. Once they express interest in a loan, we provide the investor with all the information on the loan including the loan application, a recent appraisal and a preliminary title report. All loans are escrowed by local title companies which record the Trust Deed with the name of each investor listed on the Trust Deed.

Questions by Trust Deed Investment Sponsors

Absolutely! A buyer can access available inventory at any time. If you think you want to list a TrustDeed for sale during the next few months, you should get a head start by creating your Sponsor profile and promoting your new marketplace channel page among your business and personal connections. That way, once your Trust Deed materializes, your fundraising process will be a breeze.

It is a phone or personal interview to meet your team and chat about your experience, qualifications, background, and objectives.

As long as you are raising debt, all kinds of real estate scenarios are welcome: residential, commercial, or mixed-use; acquisition, refinancing, or development. Just note that you cannot submit a listing to finance your home or non-real estate collateral.

Our terms of use include confidentiality provisions that are intended to protect Trust Deed sponsors from users’ misuse of their Trust Deed information. You could also submit your own confidentiality agreement for investors to sign. However, we cannot assure you users will comply with these provisions. We strongly recommend that you do not list any Trust Deed information unless you are comfortable with it being public.

The fractionalized Trust Deed interests cannot be sold to more than 10 persons who meet one or both of the qualifications based on income or net worth.

With the delay of Title III of the JOBS Act and states continuing to roll out their own legislation around crowdfunding, we will see continued growth of platforms that have state-specific offerings. What are Maximum loan to value ratios?

At CrowdTrustDeed, we ensure that Sponsors are most interested in the preservation of an Investors principal investments, and because of this, we seek out Sponsors that originate extremely conservative loans. The key to underwriting secure loans is substantial equity in the property, which is demonstrated in low Loan-to-Value ratios. Typically, a financial institution will lend up to 80%, 90%, 100% or even more of the value of the real estate securing the loan, leaving little or no equity protection. At CrowdTrustDeed, the LTV’s are subject to the limits below, resulting in a higher average protective equity cushion for our Investors. The LTV ratio is determined by dividing the total encumbrance (Loan) by the value of the property.

The aggregate principal amounts of the notes or interests sold, including the balance of any senior encumbrances, are subject to maximum loan to value percentages. The percentages are based on the current market value of the property as determined by the broker or appraiser as required by Section 10232.6. The maximum loan-to-value (LTV) percentages are:

  • Single-family, owner-occupied - 80%
  • Single-family, not owner-occupied - 75%
  • Commercial and income-producing properties - 65%
  • Single-family residentially zoned lot or parcel which as installed offsite improvements including drainage, gutters, sidewalks, paved roads, and utilities as required - 65%
  • Land that has been zoned (and, if required, approved for subdivision as) commercial or residential development - 50%
  • Other real property - 35%

The percentages above can be exceeded when and to the extent that the broker determines that exceeding the percentages is reasonable and prudent considering all relevant factors pertaining to the property; however, in no event can the aggregate principal amounts of the notes or interests sold, including any senior encumbrances, exceed 80% of the current market value of improved real property or 50% of the current market value of unimproved real property

We are here to help. However, at CrowdTrustDeed, sponsors are in the driver’s seat and set the Trust Deed terms, fees, minimum investment amounts, funding goal, closing timeline, etc. We give you total control and flexibility to manage your capital raise from start to finish and leverage our technology to make the process efficient.

The Sponsor will work with the investors on a case by case basis in the event of a Default.

Retaining legal counsel is at the discretion of investors and Sponsors.

Investor Questions

I am not going out of business, but again, you are on the Deed of Trust and FCI is the sub servicer.

We're here to help you