Frequently Asked Questions

General Questions

What is a Trust Deed and How is My Investment in a Private Money Loan Secured?

When one invests in a Private Money Loan, the collateral is real estate secured by a Deed of Trust recorded in the County where the property is located.

When a Private Money Loan is completed on a property, there are two parts to the transaction:

The Promissory Note and the Deed of Trust.

Both the Deed of Trust and the Promissory Note identify the Lender, Borrower, and secured Property; while the Promissory Note (or “Note”) contains the Terms (interest rate, monthly payment amount, and due date or “maturity”) as well as the Conditions of the loan (such as what happens if a payment is made late).

The Deed of Trust is a security instrument which gives the lender a recorded interest in the property the borrower has pledged as security for the performance of the Promissory Note.

A Deed of Trust is commonly referred to as a Trust Deed. provides investors the opportunity to participate in whole or fractional interests in Trust Deed secured Private Money Loans.

What are the Benefits of Investing in Private Money Loans Secured by Trust Deeds?

The benefits of investing in Private Money Loans include steady monthly cash flow, consistent returns over a specific period, and a predictable return of the principal investment at loan maturity or when the property securing the loan is sold or refinanced.

Investors who require portfolio diversification like investing in Private Money Loans as they can select the dollar amount of their participation, whether whole loan or as a fractional interest in a loan.

Private Money Loans are a favored investment for high net worth individuals seeking to balance and diversify their investment portfolios, as well as IRA/401k holders, family trusts, financial managers, and smaller investors.

Investors in Private Money Loans like the fact that they are named on the recorded Trust Deed for their investment, secured by real estate, a familiar and tangible asset that is fundamentally easy to evaluate.

What is Role? provides Investors an efficient online marketplace to view, evaluate, and acquire Private Money Loan investments secured by California real estate. is broker licensed with the California Bureau of Real Estate as “Pacific Private Money, Inc. dba” Cal BRE #01897444 / NMLS #945582 does not act as an investment advisor and does not offer advice or negotiate on behalf of an Investor of Sponsor. recommends that investors seek and obtain advice from independent third-party real estate and investment advisors, including but not limited to, professional tax and legal counsel.

Can I Invest in a Fraction or Portion of a Loan?

Yes. Once registered and approved for investment on an investor can choose between a variety of Private Money Loan investments including both fractional or whole loan interests.

In fact, all loans presented for investment on are offered as fractional interests.

Depending upon the size of the loan, each loan is divided into as many as ten (10) equal interests or “Units”.

An investor purchasing one (1) fractional interest in a five (5) Unit loan would hold an “undivided 20% interest” in the loan, and its legal vesting as recorded on the Deed of Trust with the County would be worded as such.

An investor purchasing three (3) fractional interests in a five (5) Unit loan would hold an “undivided 60% interest” in the loan.

An investor purchasing ALL the fractional interests in a loan would hold an “undivided 100% interest” in the loan, otherwise referred to as a “Whole Loan” purchase.

Under California law, any modifications to the terms of a fractional loan require the approval of a majority of the investors holding interests in the loan. Therefore, any investor holding a “majority interest” in a fractional loan controls the loan.

What Types of Private Money Loans are Available for Investment?

Most investments available on will be Private Money Loans secured by Deeds of Trust recorded in “first position” and commonly referred to as “First Trust Deeds”.

From time-to-time may list “Second Trust Deed” Private Money Loans secured by Deeds of Trusts in “second position” which meet the underwriting criteria of the platform managers.

Investments approved for listing and sale on will typically be Business Purpose purchase money loans secured by easy to evaluate single-family residential properties with solid equity positions.

The most common type of Business Purpose loan available for investment on is the classic “Fix & Flip” loan. These loans are favored in that they are typically short-term (6 to 12 months) and thus not as subject to market risk as longer-term loans.

All loans listed for sale on will have a clear and quantifiable repayment strategy or “exit strategy”.

In the Fix & Flip example, it will be the sale of the property upon completion of the value-add renovation at the After Repaired Value (“ARV”) which is easy to verify by looking at the sales prices of comparable renovated properties and by third-party valuations and appraisal.

Our predominant borrower profile is one of profit driven professionals with good credit and financials that need to close quickly on good deals (not credit compromised consumers). will occasionally offer loans for sale secured by owner occupied homes, wherein the loan proceeds are for business purposes (such as acquiring a rental property).

What is a “Sponsor”?

A Sponsor is an approved and vetted person or company that underwrites and originates Private Money Loans and is authorized to list and sell them on

Our first two Sponsors are Cirius Pacific Fund, LLC, and Pacific Private Money Fund I, LLC, managed by co-founders, John Citrigno and Mark Hanf, respectively.

What are a Sponsor's responsibilities?

Sponsors are responsible for originating the loans offered for sale on and serve as the lender and seller on the Private Money Loan transaction.

Our Sponsors apply stringent underwriting guidelines, and mortgage loan industry best-practice loan documentation, disclosure, processing and procedures.

Sponsors are responsible for packaging and uploading onto all the information and disclosures necessary for investors to understand the loan being offered for sale, and risks involved. has a preferred provider agreement with the loan servicing division of Pacific Private Money, Inc., to handle the payment collection, borrower interface, and interest payment distribution as it relates to your Private Money Loan investment. and its Sponsors handle all the interaction with the borrower so that our investors can relax and receive their monthly interest payments.

How does the Private Money Loan Investment Process Work?

All of the loans offered for sale on are originated by our vetted Sponsors who have qualified the borrower and property and are originating or who have originated a loan.

Once determines that the loan is suitable for listing on its platform, and all necessary information, and disclosures have been uploaded, the loan is approved for publication and an email alert is sent to registered investors who might want to participate in the loan.

Qualified Investors, once registered on, can access and review loan summaries online and select the loans in which they would like to participate.

When an investor has expressed an interest in a loan, provides the investor with all the information on the loan including the loan application, a recent appraisal, and a preliminary title report.

The investor then pledges the dollar amount they want to invest (typically in $50,000 increments for fractional interests); or the investor can pledge the whole loan.

At which point loan sale and assignment documentation is prepared and provided to the investor for review.

All loans are escrowed and title insurance is provided by one of the major national title companies, which record the Deed of Trust with the name of each investor that has invested in the loan.

Is the Interest Rate “Net” to the Investor?

Yes. All interest rates posted on are “Net” to the Investor.

(Net of all the fees and costs associated with originating, underwriting, funding, and loan servicing).

In addition, the loan Sponsor covers all costs associated with the purchase/assignment of the Private Money Loan, which include escrow, title, recording, and loan servicing setup fees.

The Interest Rate you see on is the interest rate (pay rate) you receive!

How Does Get Paid? charges a listing fee which is paid by the loan Sponsor. Much like a traditional real estate listing commission the listing fee is only paid when the loan is sold.

The listing fee is a half-point (50 basis points) to the Sponsor (Seller) based upon the dollar amount of the loan sold. The minimum fee for a listing Sponsor is $500.

The sale of a Private Money Loan, or fractional interest therein, of less than $100,000 will result in the minimum fee being assessed.

Title, escrow/assignment, recording, and other customary closing charges are not included in the listing fee. These costs of sale are paid by the loan Sponsor (seller).

What is the Geographic Area covered by

Although is licensed to list and sell Private Money Loans that are Trust Deed secured by properties located throughout California, to Qualified California Investors, its main geographic coverage area is Northern California. is San Francisco Bay Area-based and such its primary focus and the majority of its loans are originated and funded on properties located within the San Francisco Bay Area and select markets of Northern California, such as the Greater Sacramento area.

What is the Minimum Investment?

The Minimum Investment on depends upon the size of the Private Money Loan offered for sale. Fractional interests range in size from $25,000 to $50,000 per loan, or more.

As California BRE regulations limit the number of investors in a fractional loan to ten (10) the Minimum Investment in the larger loans may be $100,000, or more.

However, due to the intensive paperwork, time, and costs involved in processing fractional interests, will typically try to limit the fractionalization of a loan to four (4) investors.

What is the Average Loan Size?

Loans offered for sale on will typically range in size from $150,000 to $750,000, or more. The average loan size is $500,000.

What are the Typical Loan Terms?

The terms of the loans offered will be determined based on the type of Private Money Loan being completed.

Most loans on will be for 12-months with interest-only monthly payments, a balloon payment of principal due at maturity, and a 4-month minimum interest guaranty at origination.

For investors seeking shorter term investments offers 6-month “Fix & Flip” loans with a 3-month minimum interest guaranty at origination. These loans are favored by Investors that like the relative liquidity of bank CD’s, but who prefer the higher yield that Private Money Loans offer.

For investors seeking longer term investments offers loans with 2 to 3-year maturities with 6 to 12-month minimum interest guarantees at origination, and some loans as long as 5 to 7 years. These longer-term loans are a favorite of Self-Directed IRA Investors.

Why must investors meet certain “Investor Suitability” Requirements?

To make Trust Deed investments through the online marketplace you must be a Qualified California Resident or Qualified California Entity.

The investment must be deemed to be suitable and appropriate for the investor, given the investors investment objectives, portfolio structure, and current financial situation.

You don’t need to be an Accredited Investor; however, you do need to qualify based on a number of factors including: Net worth, income, and capacity to understand the investment.


Trust Deeds vs. Platform Notes: What is the Difference?

At your Trust Deed investment is secured by a Deed of Trust recorded on the property for which the loan is made. You are investing in a Deeded Interest, not a Platform Note.

Most crowdfunding sites offer what are known as “Platform Notes” which are significantly different from Trust Deed investments as they are NOT secured by a recorded Deed of Trust.

With a Platform Note, your only security is the good faith and credit of the company or crowdfunding site offering the investment.

With a Trust Deed investment from, you or your investment entity are named on the Deed of Trust.

You fund your investment through an escrow holder and receive lender’s title insurance from a major national title insurance company, which at closing records the Deed of Trust in the county in which the property securing the loan is located.

In California, a Trust Deed investment can be fractionalized between up to 10 investors. You can invest in a fractional interest, typically allocated in 10% to 20% increments, up to a 100% interest if you purchase the whole loan. Under California law, anyone holding a majority interest in a Trust Deed investment can have some control over certain decisions concerning their investment, such as whether to extend the maturity date, or not.

With, because you own a Deeded Interest, you can sell or assign your Trust Deed investment.

Depending upon the note interest rate and market conditions, you might retain a profitable “spread” while getting your principal back to make another investment.

Platform Notes are significantly different.

They are NOT secured by a recorded Deed of Trust. Your only security is the good faith and credit of the company or crowdfunding site offering the Platform Note for sale.

Platform Notes have no limit to the number of investors, and are typically crowdfunded between dozens and sometimes hundreds of investors, none of whom have any control or say in decisions concerning their investment.

As a Trust Deed investor with, you enjoy a far more secure Private Money Loan investment position than with a Platform Note.

Investor Questions

How do I know the property values are accurate?

Depending on the property and transaction complexity, our Sponsors utilize Licensed Appraisers, or Broker Price Opinions (BPO’s), along with personal inspections of properties to determine and present the most accurate valuations possible.

The Fair Market Value (FMV) of the property is determined by an appraisal effort that compares the subject property to other similar properties in the same community that have recently sold (establishing sale comps).

An appraiser will also identify similar properties for sale but which haven’t sold (an indicator of the market ceiling). Adjustments are made to the value of the subject property based on factors such as size, location and physical condition.

Investors are provided access to the appraisals and BPO’s for each property securing the Private Money Loan investment on In addition, Investors are encouraged to double-check property valuations using and other readily available online resources.

Is my account information confidential?

Yes. To learn more about how we protect your information, please review our privacy policy.

Will you use my information to spam me?

No. We will only send you emails for which you specifically sign up, and as required by law (e.g. changes to our terms of use). We do not like to be spammed and we won’t spam you.

Do you make investment recommendations or provide advice? does not and will not make any investment recommendations or provide legal, tax, or financial advice.

Before committing to any Private Money Loan investment, investors should consult their own advisors and conduct their own due diligence to ensure that the investment meets their criteria and objectives.

What is the minimum investment?

Investment minimums will usually start at $25,000.

When I invest, what do I own?

When you invest on you own a whole or fractional interest in Private Money Loan that is secured by a Deed of Trust (Trust Deed) that is recorded against the property for which the loan is being funded.

Who will be making decisions?

The Sponsor that has originated the Trust Deed investment will be managing the Private Money Loan pursuant to the terms of the Loan Sale and Servicing Agreement that is the governing document between the Sponsor, you and the other Investors, and the Loan Servicer, once the investment in the loan has funded.

You should carefully review the Loan Sale and Servicing Agreement that will be provided to you once you have pledged your investment, to make sure you understand how things will be handled until your investment is repaid.

What voting rights will I have?

Investors using to make Trust Deed investments must understand that they are making what is known as a “passive” investment, and have no “voting rights” in general terms.

That said, IF you invest in a whole loan or hold the majority interests in a fractional loan, under California law you have certain intrinsic rights, or control, over the loan. For example, modifications to the original terms will be subject to majority approval, such as granting the borrower an extension of the loan term at maturity.

What kind of reports will I see after I invest?

Pacific Private Money, Inc., our sister company and loan servicer, will provide each Trust Deed Investor with a monthly statement showing their interest distribution for each whole loan or fractional interest.

The monthly statement will report activity such as the date the borrower has made its monthly payment, the date the investors share of said payment is distributed, as well as late payments (if any).

Monthly statements will also account for late payment penalties, and default interest (if any loan were to go into default) which are shared with our Trust Deed Investors and thus enhance investor returns.

Each year your will provided with an IRS Form 1099-I, which your CPA can file with your annual tax return(s) to properly report your interest income to the IRS and State of California, as required.

Can I sell my investment?

Yes. However, the nature of Trust Deed investments is generally “buy and hold”.

Please consider the loan term as part of your Private Money Loan investment strategy and try to select loans that have a term consistent with the amount of time you want to hold said investment.

Certain costs will be incurred in the sale/assignment of a Trust Deed investment, including escrow and title fees, notary and recording fees, and the listing fee, paid only when your interest is sold.

What are the tax implications of my investment?

We cannot give you tax advice and recommend that if you have any questions concerning the tax implications of Trust Deed investments on that you consult your CPA or tax advisor.

Trust Deed Investors will be responsible for paying taxes on the interest income they receive, which after the end of each year, each investor will be sent an IRS Form 1099-i that they can provide their CPA or tax advisor which must be filed with their State and Federal tax returns.

Does PML vet Trust Deeds?

PML is a disintermediated (i.e. direct) investment platform. This means investors and sponsors get to skip traditional industry middlemen and save time and money in the process. However, this also means investors must conduct their own due diligence and ensure that the investment meets their objectives. We also encourage investors (especially those unfamiliar with passive real estate investments of this kind) to retain their own advisors to assist them in this process.

After I invest, will I have an obligation to put in more money?

Generally, no, but this will depend on the Trust Deed terms, which you should carefully review before investing. You should note that even when investors are not obligated to make additional contributions, when there is a shortfall, new or existing investors could provide additional capital. If this is the case, the non-contributing existing investors would be diluted, thereby getting the proverbial “smaller piece of the pie.”

Are direct real estate investments for me?

We do not make investment recommendations. You should make up your own mind about the Trust Deeds listed on our site, based on your investment objectives and criteria. Listed Trust Deeds involve risks. If you do not have sufficient experience to evaluate the investments listed on our site, you should talk to an investment advisor, lawyer, accountant, or other professional.

What's the difference between the direct investments listed on PML, a REIT, and real estate "crowdfunding" sites?

Most REITs will have a discretionary component and invest in multiple assets. At PML, all investments are single asset and single purpose: you decide how your money gets allocated. In addition, at PML, you get to skip the REIT itself and invest directly with the Trust Deed sponsor. This saves a significant layer of fees and expenses.

There are also many “crowdfunding” companies out there. These companies have replaced traditional intermediaries (REIT, etc.) with themselves and built online portals to obtain funding. In essence, they are perpetuating the old model of financial intermediation. This may be great for those who don’t mind paying significant fees and expenses to a middleman to do their homework. However, at PML, we decided to forgo the old model altogether and give investors a chance to deal directly with the Trust Deed sponsor. You are always free to retain your own advisor. But now this is your choice, rather than ours.

Where is my money?

It’s simple: when a Trust Deed is ready to fund, you will initiate a wire transfer to the Escrow company handling the transaction. Likewise, when a Trust Deed sponsor is ready to distribute funds to investors, they will initiate a wire transfer directly to your account. PML does not see your account information and cannot access or control your money.

Why would someone pay over 10% for a mortgage loan?

The typical borrower for these loans is a real estate investor requiring a bridge loan to help them acquire or refinance an investment. These investors are attempting to quickly take advantage of an opportunity and don’t have the time or can’t qualify for a conventional loan. Sometimes borrowers are self-employed and don’t have a qualifying “stated” income. Other times borrowers are experiencing a life event; divorce, loss of job, illness, or death of a family member. These events cause a need for non-traditional financing, and due to the current credit crisis, private money becomes their only option.

What are the basic steps sponsors use to make a loan?

The basics of trust deed investments are relatively easy to understand:

  1. Establish the value of the property being provided as collateral
  2. Evaluate the amount of the loan request
  3. Include any loans senior to the loan you are being asked to make
  4. Determine the loan-to-value
  5. Determine the Net Equity
  6. Carefully evaluate the borrower’s track record and ability to repay the debt
  7. Perform Due Diligence on the property, borrower and loan application
  8. Make funding decision
  9. Originate Loan
  10. Service the loan and make payments to the Investor

What about the new regulations regarding a borrower's ability to repay the loan?

In addition to the detailed review of the underlying collateral to form an accurate market valuation of the property being secured, PML Sponsors will be using standard credit underwriting procedures in determining a borrower’s ability to repay the loan. A typical loan package will include a loan application, credit report, preliminary title report, income/asset verification, and appraisal. Underwriting processes may include the review of the borrower’s credit report, employment history, income history, exit strategy and personal reserves to determine the creditworthiness of the applicant.

Do you have further questions?

Some questions are sure to arise. Call us. We’re always eager to talk about Trust Deeds and explore how they might fit your financial picture. In fact, our team prides itself on the creation of innovative solutions that best suit the individual needs of our clients. We also know from experience that everyone’s needs are different, so we encourage you to confer with your legal and financial advisors when making any investment decisions.