Feb292016

During the recent Stock Market swoon, I kept reading the daily diaries of various market prognosticators. One day the market was down because of China, the next day the market was down because of oil, the next day the market was up because of China and the next day the market was up because of Oil. What? Are you kidding me? Now Warren Buffet says the Politicians and forecasters are wrong, that the economy is ok. Complexity abounds when conflicting macro and micro economic data layers on top of public sentiment which layers on top of company opaqueness which layers on top of various stock and bond instrument structures.

While complexity breeds opportunity for sophisticated Hedge Funds and Private Equity firms on Wall Street, complexity offers peril, yield depleting fees and conflicting signals to the average investor. Mortgage Vintage prefers investment plans that as Van Morrison said, “Keep it Simple, and that’s that.” I don’t claim expertise on how an informed Wall St. Trader or Investor manages a Wall St. portfolio strategy based on these disparate and sometimes conflicting market reports. However, I can tell you that a Keep it Simple Trust Deed Investment portfolio strategy provides a transparent, high yield current income. Here are some ways that Mortgage Vintage and CrowdTrustDeed (Company) provide a simple approach to an approximate 10% current income annual yield:

  1. California Trust Deeds: The Company only originates California 1st and 2nd Trust Deeds which implies debt only and no equity participation. Ownership percentages are kept simple through a fractional Interest structure. The company does not have to bear the accounting, regulation and management expenses of a Mortgage Fund.
  2.  Quality Assurance: The Company originates all of the Trust Deeds that are sold
  3. Transparent Fees: Origination points and fees plus a small spread between the note rate and the sold rate pays for all Company costs and expenses
  4. No Middlemen: The days of the no value add middleman are numbered. The Internet disintermediates players that are not adding value. In our case, the Company connects the borrower and the lender and we add the important secret sauce that makes a viable, compliant and well performing Trust Deed Investment.
  5. Low Overhead: The Company maintains a low overhead and utilizes skilled virtual employees that specialize in their chosen field. i.e. marketing, finance, document management and servicing.
  6. Regulations: The California Bureau of Real Estate (CalBRE) regulates the Sponsor as opposed to the Securities and Exchange Commission (SEC)
  7. Online Marketplace: The www.crowdtrustdeed.com Trust Deed Marketplace provides an online, 24/7 environment where investors can review deal information at their leisure and invest when they want and what they want.
  8. Systems and Checklists: Automated workflow systems, virtual file folders and vetted origination, underwriting and servicing systems allow for fast, efficient and compliant loan processing.
  9. Online Payment Status: Payment histories, loan documentation, terms, servicing notes and all important servicing details are available online.

As Van Morrison continues, “get back to something simple just to save yourselves”. Developing a Trust Deed Portfolio of high yielding current income California Trust Deeds remains one of the best diversification plays for the astute investor. Yields are high, fees are low, transparency is evident and you get to choose the deal. You won’t be subject to any kind of “Manager” blindly placing your funds into an investment that you may or may not have approved. You make the choice. What could be simpler than that?

Do you have a good story regarding your Trust Deed Portfolio? We would like to know.