It's easy to hear “secured by real estate” and move on without asking what that really means. For investors used to stocks, bonds, or funds, the idea of security is often abstract, a diversified basket, a company's promise to perform. Trust deed investing works differently, and understanding that difference is what lets an investor evaluate a deal with real confidence instead of just trusting the label.
When JMJ Funding places an investor's capital into a trust deed, that investment is recorded against a specific property. If the borrower stops paying, the lender has a direct, legal path to the collateral itself, not a claim in line behind other creditors. Position matters here. A first position trust deed sits ahead of every other claim against the property except taxes. That's the position JMJ Funding structures for its investors whenever possible, because it's the position with the clearest path to recovery if a deal goes sideways.
Loan-to-value is the other half of the picture. A property's LTV tells you how much cushion exists between the loan amount and the property's actual value. A loan funded at 60% LTV means the property would need to lose 40% of its value before the investment is genuinely at risk. That cushion is what separates a well-structured private loan from a speculative one, and it's a number every investor should ask for before committing capital, not after.
None of this replaces due diligence on the borrower or the deal itself, but it does mean an investor's downside is anchored to something concrete: a specific piece of property, a specific position, and a specific number. That's the case for trust deed investing done right, and it's the standard JMJ Funding underwrites to on every deal we bring to our investors.
