BUSINESS STRATEGY
many furious investors found out the hard
to be an investment Ponzi scheme, the firm
not consider offering it to their clients.
kerage companies. As evidenced by Moody’s
imately 1,800 investors to invest in trust
investing works, it can be quite a rewarding and
AAA investments leading up to the financial
Mortgage followed the same path as Boileau
listed above are why these investments are not
way, credit rating services can mislead bro-
blunder in rating mortgage back securities as crisis. According to a report submitted by the Financial Crisis Inquiry Commission in January 2011, “The three credit-rating agencies
were key enablers of the financial meltdown. The mortgage-related securities at the heart of the crisis could not have been marketed and sold without their seal of approval.”
#4
TRUST DEED INVESTING IS WIDELY MISUNDERSTOOD
Trust Deed Investing is Widely Misunder-
stood: The reputation of trust deed investing received its first big blow in the early 1980s
from the implosion of Boileau and Johnson. Taking advantage of the 10-year real estate boom in Southern California from 1970 to
1980, Boileau and Johnson offered very high risk second, third, and fourth trust deed in-
vestments to mostly elderly clients. Reported 34 PRIVATE LENDER
lost $20 million given to them by approx-
deeds. In the 1990s Gary Naiman of Pioneer and Johnson, further damaging the repu-
tation of trust deed investing. Naiman mis-
managed and lost $200 million given to him
by approximately 2,300 investors to invest in trust deeds. Most of Naiman’s investments
were second and third trust deeds, which re-
For those who understand how trust deed
lucrative investment vehicle. The four reasons
traditionally offered from brokerage companies or the large broker dealers. This is good news for private money brokers who specialize in trust deed investments. Meaning, they can
maintain their unique niches, and can offer
superior returns to those investors who under-
sulted in massive losses when the real estate
stand them and seek them out. ■
The tremendous fall out of investment firms
ABOUT THE AUTHOR
of trust deed investments, leaving many
Corey Curwick Dutton is a hard money lender and the founder of Private Money Utah, a Salt Lake City-based, private money brokerage. Her team provides nonbank loans for real estate acquisitions, development, rehab, and other specialized assets. Mrs. Dutton is widely recognized in the private money lending industry because she speaks and writes about tough topics such as loan scams and hard money “protocol.” Originally from Austin, Texas, Corey is an MBA Graduate who enjoys skiing and mountain biking in the beautiful Utah outdoors. You can reach Mrs. Dutton at: www.PrivateMoneyUtah.com.
market began to tank at the end of the 1980s. like these have compromised the reputation
investors confused about how they work. Because of the financial disasters of firms like
Boileau and Johnson and Pioneer Mortgage,
trust deed investing is widely misunderstood, and is often categorized as an extremely high
risk, “alternative” investment. For this reason, many brokerage companies also tend to mis-
understand trust deed investing, and thus do