Trust deeds are not as liquid as stocks. Your capital is usually tied up for the duration of the loan term. Different Contexts: Scotland vs. USA
It is important to distinguish between and Scottish Trust Deeds : buy trust deeds
While potentially lucrative, buying trust deeds is not without risk. Trust deeds are not as liquid as stocks
In Scotland, a "trust deed" is a formal debt solution where a person agrees to pay back what they can afford over a set period (usually four years) to settle debts. USA It is important to distinguish between and
Experienced investors typically do not fund loans higher than 70% LTV . This ensures there is enough "cushion" or equity (at least 30%) in the property to cover the investment if a sale is required after foreclosure.
Trust deeds often offer higher interest rates than traditional savings or bonds.
If a borrower defaults, you must be prepared to initiate foreclosure. This process can be daunting and may require you to eventually take ownership of the property to recoup your investment.