Trust Deed Investments

The Better Alternative

Did you know that if you are investing in individual trust deed investments, you could be missing out on a 20% tax deduction on the interest income? This is one of the biggest reasons why many investors are moving away from investing in trust deeds and towards investing in a diversified mortgage fund.

A mortgage fund offers several advantages over individual trust deeds. Not only does a mortgage fund structured as a real estate investment trust offer the 20% tax deduction, but it also offers investors a more consistent approach to earning consistent monthly cashflow.  

Learn more about the benefits of a mortgage fund by clicking here or contact our Investor Relations team today at (858) 242-4900.

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What Is A Trust Deed Investment?

A trust deed investment is a Loan made by an investor (commonly referred to as the Lender) to a Borrower using real estate as collateral. The Borrower makes payments to the Lender per the terms of the Promissory Note. The term trust deed investment refers to the document or “Deed of Trust” that is used to secure the Loan to the property.

Investing in Trust Deeds can be an excellent alternative for investors seeking long term cash flow with the security of real estate. Trust Deeds traditionally offer higher yields when compared with other income generating investments. Unlike a mortgage fund or many crowdfunding platforms, investors are secured directly on the property with a Deed of Trust or Assignment.


TaliMar Financial has developed a proprietary online Investor Portal that allows investors to view the statistics on the mortgage fund, including the individual trust deeds within the fund. The Investor Portal is “real time” so investors can quickly review their current account balances and manage their investment.

Click the link below to visit our Investor Portal and view more detailed information on the trust deed investments within the mortgage fund.

What the Advantages of a Mortgage Fund over a individual Trust Deed?

TaliMar Income Fund I offers several advantages over individual trust deeds, making them an attractive investment option for many investors. One significant benefit is the diversification that mortgage funds provide, as they pool together various loans, reducing the overall risk associated with a single property or borrower. This diversification leads to a more stable and consistent income stream for investors.

Other benefits include the following: (1) investors receive a 20% tax deduction on the monthly income, (2) the minimum investment is only $50k with the ability to increase your investment in $1k increments, (3) it’s a much more passive approach to investment because individuals don’t have to find trust deeds to invest in and then actively manage the trust deeds, (4) the fund will offer a more liquid option to investing, and (4) it’s available to investors using a self directed IRA to invest.

Overall, mortgage funds present a compelling alternative to individual trust deeds, combining diversification, professional management, and enhanced liquidity for a more robust investment experience.


Payments can be collected directly by the Lender or a third party Loan Servicer. The responsibility of the Loan Servicer is to issue monthly statements to the Borrower, collect and process payments, and submit the payoff demand once the Borrower is ready to pay off the loan. Most Servicers also offer foreclosure services. The cost of using a Loan Servicer is minimal and highly recommended.


A fractional trust deed, also known as a multi-lender loan, is a trust deed owned by more than one Lender. Let’s use a scenario in which three separate Lenders pool their money to finance a single trust deed. In this scenario, each Lender owns a 33.33% interest in the trust deed and thus each would earn a 33.33% of each payment. If the Borrower defaults on the loan and a decision to foreclose was required, that decision would have to be need to be approved by the majority interest holder in the trust deed or the aggregation of Lenders that make up the majority interest. In this scenario, 2 of the 3 Lenders would need to approve the foreclosure. Many states require that a fractionalized trust deed be serviced by a third party Loan Servicer.


One of the most common risks associated with a trust deed investment is late or non payment. If the Borrower does not or becomes unable to make the payment per the terms of the Promissory Note, the loan is considered to be in default and the Lender has the right to commence a foreclosure action (note, this is specific to trust deed states). Should the Borrower be unable to bring the loan current, the property is sold at a foreclosure sale. The proceeds from the sale will be applied to the unpaid principal, interest, and fees associated with the foreclosure action.


The most common ways of locating trust deed investment opportunities is to attend a local real estate investor networking event, post advertisements on real estate websites, or work with a real estate broker that specializes in trust deed investments. We highly recommend that new investors work with an experienced broker that is local to their market and has a strong understanding of state lending regulations.


The most common mistake made by trust deed investors is funding a high yield trust deed without understanding the risk. We recommend new investors focus on trust deeds secured in 1st position on a single family or multi-family property at 65% to 70% of current value. Lenders in 1st position will get paid first when the property is sold or refinanced. Focusing on trust deeds secured at 65% to 70% of current value will lessen the risk of principal loss if the value of the property declines or a foreclosure action is required. Lastly, single family and multi-family properties are often much more liquid than other asset classes such as industrial properties or land, and therefore may retain their value better through a market slowdown.

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