Individual Trust Deed Investments: Frequently Asked Questions 

• How Do Trust Deed Investments with GNT Work?

Think of yourself, or your IRA, Trust, Corporation, as a bank lending money to a borrower who is in need of financing on a property. Your loan will earn interest on the loan for the term of the loan. GNT Financial services the loan for you and collects all the payments for you, each month GNT pays that interest to you. The loans are always secured with a trust deed against the property which is  the collateral for the loan.

• How Does GNT Financial Services determine Loan To Value on a property?

Our maximum Loan to Value on any loan will never exceed 65%. This is determined by having an appraisal on each property.  GNT also takes into consideration other factors that assist us in making sound decisions on each loan we commit to. Most loans we write will fall below the Maximum LTV level and are always well collateralized.  For example, if a commercial property is appraised at $1,000,000, a typical loan might be $615,000. This conservative loan to value creates an equity cushion (in this case over 38%, or 62% loan to value) A member of our management team personally visits and reviews every property before we issue a dime.

• What types of properties will GNT lend on?

The property types we will consider consist of commercial, residential income 1-4 units, single family residences, some raw land for development. Land Loans will typically be offered at significantly more conservative guidelines and will be reviewed on a case by case basis. A Key factor for GNT in evaluating a potential loan is the borrowers “Exit Strategy”  or their ability pay off our loan at the end of the term.  

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• Where will the GNT Lend?

Most properties are located throughout the state of California; however the highest concentration will be Southern California and San Diego County

• What happens if a borrower does not pay the loan back?

GNT Financial Services all of the private trust deeds we write.    Our  stringent underwriting guidelines are specifically designed to protect your investment. However, if a borrower does not pay the loan back, GNT financial Services Corp will foreclose on the property for the investor and assist with all the necessary aspects of this process. Once the property has been taken back, GNT will work with the client to sell the property and recoup the debt owed.  

• Who makes the decisions which loans to make:

The owner / broker of GNT Financial Services Corporation is Marcus Carter. The Trust Deed opportunities you see have already been screened and meet the basic criteria we look for in a secure loan. The investor would work with GNT / Marcus Carter to fine tune the terms of each note to make sure they are acceptable to all parties.  

• How is GNT Financial Licensed?

GNT Financial Services Corp. is a licensed broker with California Department of Real Estate. We are a member of the California Mortgage Association and a BBB “Accredited Business”.

• How do Trust Deeds Compare to other Investments?

A typical private first trust deed yields 8.5% and 11.5%. depending on the loan type. These exceptional yields provide investors with the security and income generation that is not found in other investment types. IRA’s and other tax-deferred investments vehicles can be utilized to fund Trust Deeds, providing investors with exceptional tax deferred returns and low risk.  A high rate of return coupled with Capital Preservation eliminates the value swings in a typical stock brokerage investment account.

• Does GNT earn a commission on the loans and the servicing individual Trust Deeds?  

Yes, GNT collects a fee from the borrower on each new loan that is written. In addition GNT collects a servicing premium that is paid from the yield on each loan. This servicing fee amounts to .75% annually.

• How often do I receive my interest checks?

GNT Financial pays interest earnings monthly, which are paid around the 5^th to the 10^th  of each month for the previous month’s interest. Similar to other investments, every month you will receive a statement that details the earnings and shows the loan balance and the interest paid out.

• What is the minimum Trust Deed amount?

$50,000.00  however, we look at each deal  on a case-by-case basis.

• Can I invest IRA, 401K or other Retirement funds?

Yes, it is very simple. Self-directed IRAs can invest in Trust Deeds. This can be done through a  number of self –directed IRA custodial companies. Call us for details.

• How do I take my money out of a loan?

Trust Deeds are not readily liquid investments. Exceptions are always possible, and there are investors that look to purchase notes, however most investors should play on the loan not being paid back until the end of the term.

• How do I Report this on my Taxes?

Interest income is reported on your tax returns annually. GNT Will prepare a tax statement for you on each loan that details the interest income earned.

• How do I let GNT know I am interested in investing inTrust Deeds?