But you know stocks are the only investments that will reward you with double-digit gains over time. Sorry, but that s simply not true. Notice that I said without volatility, not without risk . I will start with trust deeds, which are very similar to mortgages. Del Mar raises money from investors, pools it together and uses it to make short-term loans to builders and developers who pledge the value of their real estate as collateral.
Most loans are for a year or less, with an option to extend the loan for another year.
The company makes its profit by charging borrowers more for the loans than what it pays investors. Georgina and I are invested in seven loans paying us from 12.25 percent to 14 percent annual interest, with payments received monthly. For the builders, time is money. Defaults have been rare but do happen. Del Mar handles any foreclosure at no cost to the investor, a process that takes about four months.