Trust Deed Investing

Trust Deed Investing is one of the more overlooked ways to put your money to work in real estate. Instead of buying a property yourself, you fund a loan that is secured by one, and you get paid on the terms of that loan. It is not a stock, it is not a fund, and it is not something a broker manages on your behalf. It is you, the property, and the paperwork that protects your position.

H&M Property Partners has built our underwriting discipline around this exact structure. Below is a plain-English walkthrough of how it works, how we protect your capital, and how to get started.

What Is a Trust Deed

A Trust Deed, or Deed of Trust depending on where you live, is a document that secures a loan against real property. There are three parties involved:

● Beneficiary: you, the investor and note holder.

● Trustor: the borrower, typically a real estate investor purchasing or holding the property.

● Trustee: an independent third party who holds title on your behalf until the loan is paid in full.

The loan terms live in a promissory note. The Trust Deed itself is recorded at the county clerk's office, so the world knows the property has been pledged to secure your investment. If the borrower pays as agreed, the Trust Deed is released once the note is satisfied. If they do not, the trustee process allows the property to be sold to recover what is owed, generally a faster and less costly path than a traditional judicial foreclosure.

Why Investors Choose Trust Deeds

A Trust Deed is backed by a physical asset, not the performance of a company or a market index. Its value does not move with the news cycle the way a stock does. You know exactly what you are secured by and where your position sits relative to any other lien on the property.

● Secured by real property, not by a company's balance sheet.

● A fixed return, agreed to before you fund, not a market-dependent guess.

● First or second lien position, meaning you are ahead of nearly everyone else in a default scenario.

● Every payment the borrower makes reduces the loan balance and increases your margin of safety.

How H&M Underwrites Every Deal

Every Trust Deed we structure is underwritten the same way, regardless of who the borrower is. We hold to a loan-to-value ceiling of 70 to 75 percent of appraised or after-repair value. That gap between what is owed and what the property is worth is your protection. It means that even if something goes wrong with the borrower's plan, there is enough equity in the property to make you whole.

We also look closely at the borrower's exit strategy before funding, not after. A good Trust Deed investment starts with a borrower who has a credible, specific plan to repay, not just a property that appraises well.

How Your Investment Is Protected

● Title insurance confirms the property is free of surprises before your funds go out.

● Lien priority is verified and documented, so you know exactly where you stand against any other claim on the property.

● An independent trustee holds title until the loan is satisfied, you are never relying on a handshake.

● Escrow handles collection and distribution of payments, so your income arrives on schedule without you chasing a borrower down.

Frequently Asked Questions

-How much capital do I need to get started? Everyone has different objectives and goals. A conversation will better help us understand what would be beneficial to you.

- How liquid is a Trust Deed investment? Trust Deeds can be sold or traded, so while they are not as liquid as a stock you can exit a position, either privately or through a broker, if your circumstances change.

- What happens if the borrower stops paying? The trustee process allows the property to be sold to satisfy the debt. Because every deal is underwritten with meaningful equity behind it, this is the exception, not the norm.

-Is this the same as buying a rental property? No. You are not the landlord, you are not managing tenants, and you are not exposed to the day-to-day costs of ownership. You are the lender, secured by the property.

Two Ways to Work With Us

Whether you are looking to put capital to work or you already hold a note and want to sell it, we would like to hear from you.