Physicians exploring ways to diversify their investments may consider alternatives beyond stocks, bonds, and mutual funds. Commercial real estate offers an opportunity for predictable income, portfolio diversification, and long-term wealth growth.
One way to participate without managing properties directly is through trust deeds, a type of private real estate loan secured by property.
What Is a Trust Deed?
A trust deed is a loan secured by real estate, where the property itself serves as collateral. When an investor participates in a trust deed, their capital is lent to a borrower for a specific real estate project. Should the borrower fail to repay, the property can be used to recover the investment.
Unlike owning property directly, investing in trust deeds does not require managing tenants, maintenance, or day-to-day operations. Instead, it offers investors structured, collateral-backed returns with minimal active involvement.
For physicians with demanding schedules, this can be particularly appealing. You can participate in real estate without needing to oversee renovations, handle tenant issues, or manage property operations.
How Ignite Funds Trust Deeds
Ignite Funding carefully underwrites each loan to assess the property, borrower, and project feasibility. The underwriting process includes:
- Assessing the property value and condition
- Reviewing the borrower's experience and track record
- Calculating the loan-to-value ratio
- Evaluating the project timeline and projected completion
Once a loan is approved, Ignite Funding funds it using capital from suitable investors who participate in these trust deed investments. Investors effectively provide the loaned capital, and in return, receive structured interest payments over the loan term.
This structure allows investors to put their capital to work in short-term, high-yield, collateral-backed loans, which are independent of public market fluctuations.
Private Lending vs. Bank Lending
Many commercial real estate projects may theoretically qualify for traditional bank financing. However, banks often have:
- Lengthy approval timelines, sometimes taking months
- Rigid underwriting requirements that may exclude certain property types or borrowers
- Limited flexibility for value-add or unconventional projects
Private lenders, including Ignite Funding, provide speed and adaptability. Borrowers often choose private lenders because they can secure financing quickly and efficiently, allowing projects such as property renovations, multi-family acquisitions, or mixed-use developments to move forward without the delays or restrictions of bank loans.
This difference creates opportunities for investors. By providing capital for these private loans, investors earn predictable, structured returns while the borrower manages the real estate project.
Key Considerations for Physicians
Investing in trust deeds through Ignite Funding requires understanding the structure and terms of each opportunity. Key considerations include:
- Collateral and Security: Each loan is secured by the property itself, providing tangible protection for investors in the event of default.
- Due Diligence: Ignite Funding carefully analyzes the property, borrower experience, loan-to-value ratio, and project timeline before presenting investment opportunities.
- Term and Returns: Ignite trust deeds have a 9-month term, with the possibility of a 9-month extension. Investors receive structured interest payments, providing predictable income throughout the loan period.
- Diversification: To mitigate risk, investors can spread capital across multiple loans, varying property types and borrowers. This approach reduces the impact of any single loan default or delay.
- Risk Mitigation: By lending against real property, investors gain a level of security not typically available in unsecured investments. Ignite Funding also maintains strict underwriting standards to help manage borrower risk.
The Investor Experience
Investing with Ignite Funding is designed to be seamless and supportive, especially for busy physicians. Key aspects of the experience include:
- Full Service, In-House Management: From underwriting to servicing and collections, if necessary, all operations are handled internally. This ensures consistency, efficiency, and direct accountability throughout the life of the investment.
- Transparent Communication: Investors receive regular updates about their loans, including performance reports and any developments regarding the property or borrower. Clear, timely communication helps investors stay informed without having to manage the details themselves.
- Dedicated Client Support: Ignite Funding provides a personalized approach to investor relations. Client support is readily available to answer questions, clarify terms, and guide investors through the process.
- Structured, Predictable Processes: With clearly defined terms, interest payment schedules, and reporting, investors can plan their finances confidently and focus on their professional and personal responsibilities.
- Peace of Mind: Knowing that Ignite handles all aspects of loan management—underwriting, funding, monitoring, and, if needed, collections—allows investors to participate in commercial real estate without the typical administrative burden.
Why Physicians Should Consider Trust Deeds
Even if physicians are not actively investing in real estate, understanding Trust Deeds and private lending can inform broader financial strategies. Benefits include:
- Predictable Returns: Structured interest payments provide dependable cash flow independent of public markets.
- Portfolio Diversification: Trust deeds complement traditional investments and help protect wealth from stock market volatility.
- Reduced Management Burden: Lending through trust deeds allows physicians to participate in real estate without managing tenants, maintenance, or daily property operations.
- Access to Private Lending Opportunities: Many projects would not qualify for conventional bank financing, creating unique opportunities for investors to participate in short-term, high-yield loans.
By understanding how trust deeds work and the advantages of private lending over traditional bank loans, professionals, like you, can make informed decisions about including these investments in their broader financial plan. Proper evaluation, diversification, and an understanding of terms are key to aligning these opportunities with long-term financial goals.
Ready to Learn More? Click here or call us at (702) 739-9053 to explore how Trust Deed investments with Ignite Funding can fit into your financial strategy.
Money invested through a mortgage broker is not guaranteed to earn any interest and is not insured. Prior to investing, investors must be provided applicable disclosure documents.
