First trust deed investments are trust deed investments that have the initial claim on the real estate property and therefore are the first ones to receive payments from the debt in any circumstances. The terms first and second trust deed refers to the position of the trust deed investment, in which the first trust deed is of course the first priority of the debtor. The first trust deed holder is the first one to record against the property and this type of investment is less risky than the subsequent trust deed investments.
First trust deed investments are ideal for starters as they are safer and more secured
If you are a new investor who doesn’t know much about trust deed investing, it would be best to find a professional consultant who would explain to you how this type of investment works. To be on the safe side and to make trust deed investing a worthy retirement investment for a beginner like you, try to put your funds first into first trust deed investments. The help of a professional is essential so that you could become more confident should you decide to pick this form of investment as your sole retirement investment or an addition to your self directed 401k portfolio.
Aside from having lesser risk and being the priority to receive payments, another advantage of first trust deeds is when foreclosure takes place. When the debtor abandons the obligation, the loan goes through foreclosure and the guaranteed property is placed in an auction. When the property gets sold, the first trust deed holder will be the first in line to benefit from the proceeds of the sale. The amount of the remaining debt will be paid to the first trust deed holder and any amount left will go to the subservient trust deed holders.