Investing in trust deeds can be considered safe and can offer a great return on investment (ROI) due to several key factors:

1) Collateralized Investment:

Trust deeds are typically secured by real estate properties. As an investor, you hold a lien on the property as collateral for the loan. This collateralization helps mitigate the risk since you have a tangible asset backing your investment.

2) Priority in Repayment:

In the event of default, trust deed investors have a priority position in the repayment hierarchy. They are typically paid before other unsecured creditors, providing an added layer of security.

3) Steady Cash Flow:

Trust deed investments often involve fixed interest payments, which provide a predictable cash flow stream to investors. These regular payments can contribute to a stable income stream and steady ROI.

4) Local Market Knowledge:

Investing in trust deeds often involves focusing on local real estate markets. Having a good understanding of the local market dynamics, property values, and borrower profiles allows investors to make informed decisions and potentially identify lucrative investment opportunities.

5) Risk Management:

By conducting thorough due diligence, including assessing the borrower’s creditworthiness, property valuation, and loan terms, investors can better manage risks associated with trust deed investments. Understanding the risks involved and implementing risk mitigation strategies is crucial to maintaining a safe and profitable investment portfolio.

6) Higher Interest Rates:

Trust deed investments typically offer higher interest rates compared to traditional investments like savings accounts or government bonds. The potential for a higher ROI makes trust deeds an attractive option for investors seeking better returns on their capital.

It is important to note that while trust deed investments can offer safety and attractive ROI, they still carry inherent risks. It is advisable for investors to conduct thorough research, consult with professionals, and diversify their investment portfolio to mitigate potential risks and ensure the best possible outcome.