What You Need to Know Before Investing in a First Trust Deed (What? Why? Who?)
What is a First Trust Deed? Why should I consider it? Who facilitates this type of investment? These are common questions for those exploring alternative investment strategies. Choosing where and how to invest hard-earned money naturally leads to a long list of considerations. For those seeking greater control and consistent returns, First Trust Deed investing may be worth exploring. This article breaks down the basics: what a First Trust Deed is, why it is considered a viable investment option, and, perhaps most importantly, who can provide the education and access needed to get started. Let’s take a closer look at some of the most important questions surrounding First Trust Deed investing.

What is a First Trust Deed?
A First Trust Deed investment is defined as a loan secured by real estate. Also referred to as a Secured Promissory Note, this type of investment is collateralized by property and involves three key parties: the Trustor (borrower), the Trustee (typically a neutral third party, such as a title company), and the Lender (also known as the Beneficiary). If the borrower fails to meet the agreed-upon interest payments or payment schedule, the Trustee has the authority to initiate foreclosure proceedings and sell the property to recover the lender’s investment.
The investor’s percentage of ownership is listed on the Deed of Trust and recorded as a public document with the county where the property is located. This document creates a lien on the property, securing the lender’s interest and establishing a legal claim to the asset in the event of default.
Investors receive copies of all relevant documentation, including the executed Promissory Note, the recorded Deed of Trust, the title policy, and property insurance. The presence of this collateral gives investors the ability to earn passive income through real estate, without the need for significant capital or active involvement.
The bottom line: investors choose the borrower, select the project, and are listed on the Deed of Trust with their percentage of ownership. In return, they earn passive income based on the agreed-upon interest rate and payment schedule.
Trust Deed Meaning
A Trust Deed functions similarly to a mortgage. However, a First Trust Deed holds priority over all other liens on a property. This is made possible through a legal document that transfers title to a third party, typically a Trustee, who has the authority to enforce the terms of the agreement if necessary.
The purpose of First Trust Deed investing is to provide capital for a loan that is backed by real estate collateral. It offers an alternative method for individuals to lend money to real estate projects without going through traditional mortgage lending channels. While the term “security” is often used to describe this type of investment due to the backing of tangible collateral, it is important to note that, like any investment, it is not without risk and is never guaranteed.
That brings us to the next section: the why. Now that the “what” has been clarified, it is only natural to ask, “Why should I consider this investment strategy?” The answer lies in the details of the investment itself, the potential benefits, the risks, and everything in between. While every investor’s perspective is different, this overview is designed to provide valuable insight based on industry experience and real-world application. It is intended to help investors make informed decisions as they explore the opportunities of First Trust Deed investing.
First Trust Deed Investing
Let’s start with the perks. First and foremost, this type of investment is collateralized by a tangible asset: real estate. First Trust Deeds do not have a legally mandated maximum term length. The duration can vary depending on the borrower or the specific project. Typically, these investments range from 9 to 24 months, making them shorter in duration than many traditional investment vehicles.
What does it mean when we say the investment depends on the project? Investors have options regarding the type of collateralized asset, whether it is land, residential, or commercial real estate. Additionally, investors can choose the borrower, the geographic location, and even the specific state, city, or county in which to invest. In short, investors have a high level of control without the burden of managing the property themselves.
One of the primary appeals of First Trust Deed investing is its focus on capital preservation. Unlike more volatile investments such as the stock market, First Trust Deeds are structured to prioritize protecting principal. This is reinforced by listing each investor’s name and their percentage of ownership on the recorded deed.
Beyond capital preservation, First Trust Deed investing offers a powerful way to diversify a portfolio and allocate discretionary income. Investors receive monthly passive income payments based on the agreed-upon interest rate, which can often outperform returns from traditional investment options.
Naturally, this raises an important question: is it really that good? Are First Trust Deed investments safe?
As mentioned earlier, no investment is completely safe or guaranteed. Like all financial instruments, these investments come with inherent risk, including potential loss of capital due to market conditions, borrower default, or other unforeseen factors.
However, First Trust Deed investments are 100 percent collateralized by real property. It is important to understand that while the order in which names appear on the deed is not significant, the position of the loan is critical. Investors must confirm their position in the capital stack, which refers to the priority of repayment in case of borrower default.
Trust Deeds can be recorded in first, second, or third lien position. A first position lien means there are no other loans or liens on the property. Second and third positions indicate that other lenders have already placed claims on the asset. If the borrower defaults, the lender in first position is repaid first, followed by second and third position lenders if sufficient funds remain. Because of this repayment hierarchy, first position Trust Deeds carry less risk than those in subordinate positions.
It is important to pause and acknowledge the reality: risk is a factor in every investment decision. The challenge for investors is determining where they can earn competitive returns with the least amount of risk. An even more important question is: who can you trust to help guide and educate you on this type of alternative investment?
That is where working with an experienced, transparent, and knowledgeable firm becomes essential.
Who Facilitates First Trust Deed Investing?
In today’s world, countless companies claim to offer everything, making it difficult to determine who can truly be trusted. When it comes to First Trust Deed investing, Ignite Funding stands out as a trusted and experienced resource in the industry.
Founded in 1995, Ignite Funding has facilitated billions of dollars in real estate loans by partnering with investors to fund borrowers such as homebuilders and developers. With nearly 30 years of experience, the company acts as the intermediary, allowing investors to lend their capital to qualified borrowers in need of financing, essentially giving investors the opportunity to act as the bank.
Ignite Funding’s commitment to transparency and accountability sets it apart. The company handles every aspect of the investment process in-house, from origination and underwriting to loan servicing and, if necessary, property recovery through foreclosure. This level of involvement ensures that investors are supported through the entire life cycle of their investment.
Underwriting is a critical part of the process. Ignite Funding carefully evaluates each opportunity by assessing the borrower’s track record, the asset type, location, current market conditions, and the project’s exit strategy. No loan is originated without a clear plan for repayment. This attention to detail reflects the company’s commitment to capital preservation and risk management.
Unlike many firms that outsource key functions, Ignite Funding maintains full control over each investment from start to finish. In the rare event of a borrower default, the company manages all aspects of the recovery process, helping to protect investors’ interests without passing off responsibilities to third parties.
Education and transparency are also core values at Ignite Funding. The company emphasizes the importance of understanding that all investments carry risk. To help investors make informed decisions, Ignite Funding provides resources that promote portfolio diversification and suitability standards.
Investment opportunities offered through Ignite Funding include land acquisition, project development, financing for existing real estate, and the construction of both residential and commercial properties. This wide range of asset types makes Ignite Funding one of the most diversified real estate investment firms in the marketplace.
What Are the Benefits of Investing with Ignite Funding? Investors who choose to work with Ignite Funding enjoy a wide range of benefits, including:
- 10-12% annualized returns paid monthly on the 15th
- Complimentary accounts – no fees to open your account
- Collateralized Investments secured by an asset
- Fact Sheets – listing all aspects of each investment, including pictures of the project
- Layers of protection: investor's name on the Deed of trust, Title, Property Insurance, and Promissory Note (All of which each investor receives a copy of)
- Investors decide on the project and what they want to invest in
- Approximately 9–18 months duration
- Minimum investment of only $10,000
- 100% Transparency
- Monthly Webinars
- Online Client Portal
- Dedicated Business Development Executive and Customer Service Representatives
Conclusion
First Trust Deed investing offers a unique opportunity to earn consistent, passive income backed by tangible real estate assets. With the ability to choose the borrower, project type, and location, investors gain control and flexibility without the burden of active management. While no investment is without risk, the collateralized nature of First Trust Deeds, combined with the short-term duration and transparent process, makes this strategy a compelling option for those seeking an alternative to traditional investments. With the right guidance and education, First Trust Deed investing can be a valuable addition to a diversified portfolio.
Ignite Funding’s goal is simple: provide every investor with the tools, resources, and support needed to confidently pursue First Trust Deed investing. Have questions or want to learn more? Visit the Ignite Funding’s website or contact the team directly at 702-736-9053.