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California Trust Deed Investing Guide: Earn 8–12% Passive Income

By Hanover MC 

 | Updated April 26, 2026 | California Private Real Estate Lending

Trust deed investing in California offers investors the opportunity to earn 8%+ fixed returns through short-term, business-purpose real estate loans. By investing through Hanover MC, you can generate consistent income without the responsibilities of owning or managing property.

Hanover MC is located at 2522 Chambers Road, Tustin, CA 92780. You can reach the team at (714) 838-1474 x101 or visit hanovermc.com.

WHY INVESTORS CHOOSE TRUST DEEDS

The firm brings 20+ years of California private lending experience. Your investment is secured by a recorded lien against real property. Income comes in the form of monthly payments or a lump sum at loan maturity.

HOW IT WORKS

Step 1: Schedule a Call. Discuss your investment goals and review current loan opportunities with the Hanover MC team at hanovermc.com/contact.

Step 2: Choose Your Investment. Fractional trust deeds allow you to invest alongside other investors with smaller capital amounts. Whole trust deeds mean you fund an entire loan and retain full control. Browse available and recent deals at hanovermc.com/deals.

Step 3: Fund and Collect. Your investment is secured by a recorded lien. You receive income through borrower payments, either monthly or at loan payoff.

UNDERSTANDING LIEN POSITIONS

1st Position is the primary lien, carries the lowest risk, and has first priority in any foreclosure recovery. 2nd Position carries moderate risk with higher return potential. 3rd Position carries the highest risk and the highest potential yield. Hanover MC targets conservative loan-to-value ratios of no more than 65% to provide an added layer of protection across all lien positions.

WHAT OUR INVESTORS ARE SAYING

"I have been investing in hard money loans with David and Jo-Ann Lapin for almost 15 years. Their due diligence in providing me with the documentation about a property and the borrower has always exceeded my expectations." — Gregg A., Los Angeles

"Jo-Ann and David Lapin consistently deliver excellent personalized service. Attention to detail and professional timely follow-up are their trademarks. As long-time customers, my husband and I can attest to this team's warmth and their genuine concern for our financial welfare. We recommend their firm without reservation." — Joan E., Penn Valley

"Rare experts in a field of inferiors. No investment is without risk, but these people through their rigorous due diligence lower risk significantly." — M.B., Palm Springs

"I have been involved in doing hard money loans for over 12 years. I have used multiple brokers and have experience with all types of loans — residential, commercial, and land. Hanover MC stands apart from everyone else I have worked with." — Martin V., Verified Client

"We love the fact that HanoverMC is always on top of their game and educating us with up-to-date industry practices. This makes our relationship so much more valuable." — Verified Trust Deed Investor

"Their loan terms were great, with rates and fees better than anyone else quoted us. Jo-Ann was clear and upfront about the details and also helped talk through potential profit expansion possibilities." — Verified Client

FREQUENTLY ASKED QUESTIONS

What is a trust deed investment? You are lending money to a borrower secured by real estate. Your investment is backed by a recorded lien on the property, giving you a legal claim on the collateral.

How do investors earn returns? Returns come from interest paid by the borrower. Depending on the loan structure, you may receive monthly interest payments throughout the term or a lump-sum payment at maturity.

What are the primary risks? The key risks are borrower default, property value declines reducing collateral coverage, and junior lien exposure in 2nd and 3rd position investments. Risk is mitigated through conservative underwriting, LTV ratios not exceeding 65%, and thorough due diligence on both the borrower and the property.

What is the minimum investment? Minimums vary. Fractional trust deeds typically allow lower entry points while whole loans require a larger capital commitment. Contact the Hanover MC team to discuss options that fit your situation.

Are these investments liquid? No. Trust deed investments are generally illiquid for the duration of the loan, typically 1 to 5 years. Plan to have capital committed for the full term.

What happens if a borrower defaults? The lender may initiate foreclosure proceedings. Proceeds from the property sale are used to repay investors according to lien priority, with 1st position investors paid first.

CALIFORNIA DRE INVESTOR RESOURCES

Review these official materials from the California Department of Real Estate before investing. The Trust Deed Investing Guide (RE 35) is available at dre.ca.gov/files/pdf/re35.pdf. The Trust Deed Mortgage Loan Disclosure Statement (RE 870) is at dre.ca.gov/files/pdf/forms/re870.pdf. General DRE consumer information is at dre.ca.gov/Consumers. These documents explain risks, disclosure requirements, and investor suitability standards under California law.

READY TO PUT YOUR CAPITAL TO WORK?

Investment opportunities are often limited and may fill quickly. Schedule a 15-minute call at hanovermc.com/contact or call (714) 838-1474 x101. Hanover MC is located at 2522 Chambers Road, Tustin, CA 92780. Office hours are Monday through Friday, 8am to 5pm.

Disclaimer: Hanover Mortgage Company is California licensed only. Real Estate Broker, California Department of Real Estate, Broker License 01410448, NMLS ID 337458. Money invested through a mortgage broker is not guaranteed to earn any interest or return and is not insured. Interest on trust deeds is not guaranteed. No investment is completely risk free and past performance is not a guarantee of future results. Before investing, investors must be provided applicable disclosure documents. Investment products are not FDIC insured, not bank guaranteed, may lose value, are not a deposit, and are not insured by any federal government agency.