Investing in individual trust deeds is the preferred approach for experienced, passionate investors who have a profound knowledge of real estate investing, as it may yield a higher return than investing in a fund.
Each loan requires a great deal of analysis and due diligence on both the borrower and the property. Investing in individual trust deeds requires a constant sourcing of deals so that when one loan pays off, the money can be reinvested quickly in another.
Investing in a professionally-managed fund is less time consuming and is often preferred by passive investors and those without extensive real estate investment experience. A good fund manager, like MVP, will have the infrastructure and expertise to perform the requisite analysis and due diligence on the individual loans. With our insight and exposure in the market, MVP is also better poised to secure deals and ensure that money is continuously reinvested.
In either case, researching the “key person” who is creating the investment is very important—in the case of an individual investment, that is the broker arranging the loan. In the case of a fund, it is the fund manager.