As the trust deed holder, you are always in control of how the sale is organized and structured. The difference between the sale of a mortgage note and a trust deed sale is very subtle. Most people who want to sell a trust deed will only consider selling the entire remaining payments. However, there are other situations where selling only portions of the trust deed will result in greater financial benefits. This is why it is important to know your options before you make a trust deed sale.
A full trust deed sale option means that the purchaser pays for all of the remaining payments on your privately-held trust deed note. This is the most popular sale plan because it allows you to completely liquidate your investment and provides you with the largest amount of up-front cash. You should make a full purchase sale if you:
- Want to generate as much cash as possible from the trust deed sale
- Want to sever all legal ties and financial responsibilities from the trust deed investment
- Want to liquidate the entire trust deed investment to settle an estate
- Want to eliminate servicing hassles and risk of foreclosure associated with owning a trust deed
A partial sale option means that you sell only a portion of the payments remaining on your trust deed note. This purchase plan often makes the most sense for people who would like to generate a specific amount of cash. Choosing to sell only a portion of your trust deed payments can help you grow the capital you need now and gain a valuable residual interest in the trust deed for future income. Take advantage of a partial purchase when:
- The borrower has a poor credit history
- The trust deed has a low-interest rate
- The trust deed has a long remaining term
- The trust deed has an upcoming balloon payment due
- The borrower has a small equity position in the property
A split-payment purchase option means that the purchase is only a fraction of each of the payments remaining on your trust deed note. This purchase plan allows you to receive a lump sum of cash now while at the same time keeping some monthly cash flow to help with everyday expenses. For example, if the scheduled trust deed payments are $500 per month, you can sell just a portion of that payment for a lump sum of cash now and retain the balance of $200 to be received by you from each monthly trust deed payment.
At Beacon Capital 360, we are committed to providing you the best possible service and handling every note transaction as if it were our own. We want you to have every piece of knowledge before making a decision. Call us today at 800-460-4159 or email Chris@BeaconCapital360.com.