Integrity Capital Company offers high-yield trust deed investments (9.0%, 11% and 12%) to private individuals, corporations, pension plans, 401Ks, retirement funds, IRAs, foundations, endowments, Roth IRAs, Self-Directed IRAs, Charitable Remainder Trusts (CRTs) and SEP accounts.
When you invest in a trust deed, you become the bank and ICC acts as your personal broker. More specifically, with ICC, you become a private money source for California real estate investors who purchase, repair, and resell California real estate.
Trust deed investing is one of the safest investments and a great way to diversify your portfolio. Integrity Capital Company is a California Department of Real Estate licensed Broker (DRE License 01955411) and has brokered more than $250 million dollars of loans since 1997. Our professional loan staff has a combination of over 50 years in California lending experience.
Our unique network of professional California real estate investors come to us for funding numerous times a week. In fact, we currently broker several million in privately funded notes every month and are seeking to add interested trust deed investors to our network.
With The ICC acting as your broker of choice, we save you time, money, and effort by leveraging our professional network and reputation to bring you these high-yield lending opportunities.
Unique Risk-Controlling Features
1. Equity – our loan programs are brokered at 60-70% of After Repair Value (or LTV depending on the program).
2. Money Down – All of our professional real estate investors will have skin-in-the-game via personal funds and spread of equity in the transaction serving as their personal guarantee and commitment that the trust deed payment is a priority.
3. 1st Trust Deeds Only - Our investors are the only holder of the note and in first position.
4. No Pooling of Funds – We do not pool funds (also called fractionalized trust deeds). This gives the trust deed investor more control of the investment.
5. Non-Owner Occupied Properties Only – We only broker loans on non-owner occupied, single family homes and units (1-4) to a very unique client, the professional California real estate investor.
The Trust Deed Process
Getting Started with Our Trust Deeds
Review the frequently asked questions.
Call (213) 330-1257 to ask any remaining questions and to schedule an appointment to discuss how to move forward. Want to come in and meet our team?
A Trust Deed is Presented
ICC sends out a list of available deals. If you find something of interest, you can ask for more information
ICC sends for your viewing:
Once you review and commit to a trust deed, we will ask how you prefer to take title to the deed of trust (also known as vesting)
ICC creates documents which we send you to sign including:
Purchaser/Lender Disclosure Form
Loan servicing agreement
Any other relevant documents required by the Department of Real Estate
Commit to an Investment
After signing all documentations listed above, you can return everything via email or FedEx along with a personal check or cashier’s check (cashier's check not required). Wiring may be required for short-term deals where speed is important.
The Transaction Closes
Once escrow closes (deed of trust is recorded at the County’s Recorder Office), you will receive a receipt along with copies of the following:
Original Promissory Note
Copy of the Recorded Deed of Trust
Copy of the Title Insurance Policy
Copy of the Fire Insurance Loss Payee
Payments Mailed to You
On a monthly basis, ICC collects the payments from the borrower and sends a check to you, the trust deed investor. This will continue to occur until the loan is paid off. ICC also monitors property tax payments and insurance as part of servicing.
Frequently Asked Questions About Trust Deed Investing
1. What is a trust deed investor?
A trust deed investor is a person seeking a competitive rate of return by loaning private funds on real estate. In short, you're the bank. The loans are secured by real estate. A trust deed investor makes a higher interest yield than would typically be obtained by a regular bank and is secured by the borrower’s equity in the real estate transaction.
2. How much money do I need to start?
In 2013, the California Bureau of Real Estate (formerly the Department of Real Estate or the DRE) released new guidelines via SB978 that makes qualifying for trust deed investing much clearer. No one trust deed can be more than 10% of your net worth. This does not mean you can't have more than 10% of your net worth invested in trust deeds.
As an example, if ICC has a $100,000 trust deed available, a potential trust deed investor should have a net worth of at least $1,000,000. This same investor can come back and do another trust deed investment that meets the same 10% criteria.
The California Bureau of Real Estate (CBE) requires brokers like ICC to have investors fill out an Investor Questionnaire (also known as Real Estate form 870 of re870). We are audited by a third party auditor that reports back to the CBE on a quarterly basis and the CBE expects this form to be on file for each transaction. The form was created to ensure each investment is "suitable" for the investor.
The questionnaire is simple and asks information like name, contact info, education, experience, income, net worth, liquid capital, and goals for the investment. You can download this form and email it back to us or fax to (213) 330-4222 to be added to our First Look Program to be first to see upcoming available trust deeds.
3. Can I use IRA funds?
Yes. ICC actively places funds from IRAs, Self-firected IRAs, Roth IRAs and several other retirement accounts. Trust deed investing is a fantastic way to diversify your retirement portfolio and to leverage these types of accounts.
However, please contact your plan representative as all IRAs have different rules and regulations.
4. What’s the typical property you loan on?
ICC only lends on non-owner occupied homes in California. We mainly focus on single family homes and units (1-4 only).
Our 9% trust deed program with a five-year term focuses on single family, non-owner occupied homes that have been fixed and rented by an investor.
Our 11% trust deed program has a one-year term and focuses on single family, non-owner occupied homes that are typically in disrepair and will be fixed and resold to a retail buyer.
Our 12% trust deed investments have a one-year term focused on new construction where the borrower is building a new property with the intent to resell.
5. What is the yield?
Annualized yield will depend on the length of individual investment and the availability of a property for rollover. Some investments last for three months and some last for several years depending on the program you choose.
In our 9% trust deed program, investors will most likely see a 9% return annually because of the 5-year term on the loan and the one-year prepay typically ensures the investment stays in place for a longer period of time. Many investors seeking consistent cash flow with less in-and-out tend to invest with this program.
In our shorter-term Fix and Fix and new construction programs, there is no prepayment penalty. Loan lengths vary and annualized rate of return will depend on how quickly the loan pays off and whether there is another investment available for the same amount immediately after the close of the first.
6. Do you pool my money with other investors?
ICC does not typically pool funds. We will consider immediate family members, entities, and family trusts. We feel this method has served us well over the years and gives the trust deed investor more control over their investment. This is also often referred to as fractionized loans.
7. Is it safe?
Every investment has risk. However, unlike many other investment vehicles, trust deed investing with ICC ensures you own a first trust deed on a specific California property. This means you have ultimate control and a physical asset that can be sold or rented out.
8. Once I’ve committed to be a private lender, what should I expect?
To find out more how the trust deed process works contact ICC directly at (213) 330-4257.
9. How much do you loan out?
ICC has brokered loans from $15,000 to over $1,000,000. However, our main focus in this market is first time buyer inventory as it makes up the majority of the market. That being said, most of our loans range from the $40,000-$500,000 range.
10. What is your loan to value that you loan on?
ICC loans up to 60-70% of the After Repaired Value (ARV) of the home. If the property is in our long-term rental program, it is already repairs so it's the loan-to value we look at but it still falls within the range of 60-70% LTV.
When deciding on how much to lend, ICC considers property location, repairs needed, investor experience, and property type.
11. What are points?
Points are the fees paid by the borrower to ICC for acting as broker in a hard money loan transaction.
12. Do you offer 2nd and 3rd trust deeds?
No. ICC only offers first trust deeds on all of our investments as we feel this offers a more secure investment with much lower risk.
13. Why is my return 9% when it says 9.9% on the website? What is servicing?
ICC charges a servicing fee annually on all of our programs. Servicing includes collecting checks from the borrowers and remitting them to all trust deed investors monthly. ICC monitors property tax payments and insurance requirements on all investments and communicates with the borrower and trust deed investor as needed. ICC also handles end-of-year tax requirements and paperwork.
14. Why don’t I skip you completely and work with an investor directly?
Regulations require a professional broker to obtain higher returns and for trust deed investors to be in complaince with usury laws (read more on usury laws at the California Office of the Attorney General)
In addition, using a professional and experienced broker allows you to make higher annual returns because you're adopting an established team that finds, structures, and services the investment. It expands the marketplace for you, lowers your risk, saves you time, and ultimately increases your return tremendously.
15. What does loan servicing include?
Loan servicing includes the back-office tasks of collecting payments from borrowers, disbursing payments to the investor, mailing required notices and statements, year-end tax documents for the IRS and franchise tax board, maintaining adequate borrower insurance coverage, and coordinating foreclosure proceedings if necessary (rare).
16. Who in my network might be able to advise me on these types of investments outside of the ICC?
Having an excellent team is always important and we suggest you check with your tax advisor, financial or retirement planner, and/or your attorney. The trifecta of estate planning!
When selecting professionals, please be advised that not all will be comfortable or allowed to help make decisions on real estate and alternative investments. It is a specialty and we always encourage our network to work with professionals that will consider a client's entire portfolio including real estate. In our experience, real estate has been a major component of create wealth. Work with those that like the vehicle and will look at your situation holistically to do what's best for you.
Feel free to call for referrals. We have several financial planners, lawyers, and CPAs that specialize in working with real estate.
17. Where can I find more information about trust deed investments in California?
The California Department of Real Estate (DRE) has been renamed the California Bureau of Real Estate. They have an entire document you can read on the subject of Trust Deeds.
18. Who can invest in trust deeds?
Private individuals, corporations, pension plans, 401Ks, custodianships, LLCs, retirement funds, IRAs, Roth IRAs, Self-Directed IRAs, Charitable Remainder Trusts (CRTs), Foundations, endowments, family trusts, family members, and SEP accounts. Some retirement amounts have limits so please check with your custodian or agent.
19. Do you require fire insurance on the property?
Yes. Not only do we require fire insurance but we require the investor inform the insurance company that the property is vacant. We require coverage in the amount of the loan or replacement guarantee.
20. Will I be given a complete profile on the property?
By the time we present the property for funding, we’ve already had an independent appraisal done on the property. We’ll send to you a copy of that appraisal along with the address for you to view the property.
For more details on the Trust Deed Investment Program, complete the Contact Form below.