Investors FAQ
“Dedicated to providing secured investments for private investors”

Q:  How is my investment secured?
A:  Each of our investments is secured by a Deed of Trust.  The Deed of Trust is recorded as a lien on the property in the County is which the property is located. 

Q:  What is a Deed of Trust?
A:  The Deed of Trust is the mortgage document.  In some States, such as Washington, a Deed of Trust is used instead of a Mortgage.  With a Deed of Trust, the borrower effectively gives the lender a Deed to the property.  The lender can only use or sell the property if the borrower does not meet the terms of the loan.  As a practical matter, there is very little difference between these two methods of ensuring the lender has a security interest in the property. 

Q:  Are these investments in 1st lien position on the property?
A:  A vast majority of our loan are in 1st lien position.  In certain unique circumstances, we do offer 2nd position Deed of Trust investments to investors.  Each of our investors has the opportunity to personally choose which loans in which they would like to invest. 

Q:  How long in the investment?
A:  Typically, our loans mature in one to five years.  During this time, the borrower is obligated to make a monthly interest payment to the investor. 

Q:  What if I want to liquidate the investment before the maturity date?
A:  We offer brokerage services to help you sell or liquidate the loan prior to maturity if you desire. 

Q:  Can I invest my retirement account (IRA, pension fund, etc)?
A:  Yes.  Many of our investors invest qualified retirement accounts with us.  It does depend on the nature of the specific account you are considering.  We can help answer specific questions relating to helping you get started.   

Q:  What are the dollar amounts of the investments?  What is the minimum amount?
A:  Our loan sizes range from $20,000 to $3,000,000.  The majority of our loans range from $100,000 to $600,000.  The minimum investment amount is $20,000.  We work with each of our investors to find the size range appropriate for your needs. 

Q:  Why would someone pay 9%-13% for a loan?
A:  We provide a unique investment opportunity by specializing in funding loans that conventional FDIC insured lending institutions are unable to fund for a variety of reasons.  Our focused and streamlined due diligence process allows us to handle time sensitive transactions, in which the borrower does not have the time required to fulfill the requirements of a conventional lending institution.  At times, the loan amount may be too small for a conventional commercial lender to consider.  At times, a unique nature of a particular property may prevent a borrower from obtaining traditional financing.  Other times, we may provide funding such as a bridge loan to help complete a project. 

Q:  What are the risks associated with this type of investment?
A:  There are risks associated with any type of investment.  The primary risk is that the borrower does not pay back the obligation, which could ultimately result in a foreclosure by which the investor could potentially end up owning the property.  Our thorough due diligence process prior to originating any loan is intended to eliminate high-risk loans.  Also, by maintaining loan-to-value (LTV) ratios under 60%, we attempt to reduce the investor’s risk exposure in the event of a foreclosure.  Puget Sound Investors LLC works closely with the investor until each loan is paid off to ensure their investment is protected.