Investor Guide

California Trust Deed Investing: Who Can Invest

Updated October 2, 2026 · 4-minute read

Investments in trust deeds secured by one or more interests in real property are subject to risk of loss. Trust deed investments arranged by HanoverMC are available to accredited California resident investors only.

Who qualifies as an accredited investor?

An individual generally qualifies by meeting one of these SEC tests:

• Net worth over $1 million, excluding your primary residence, alone or with a spouse or partner.
• Income over $200,000 individually, or $300,000 with a spouse or partner, in each of the prior two years, with a reasonable expectation of the same this year.

The RE 870 Investor Questionnaire

Each investor completes the California Department of Real Estate's RE 870 Investor Questionnaire. It asks for:

• Your employment and education
• Estimated annual income
• Estimated net worth, not counting your home, furnishings, or cars
• Estimated liquid assets, such as cash and marketable stocks or bonds
• Your investment experience, including years investing in trust deeds and how many you've made
• Your other current investments
• Your investment objective for trust deeds

Whole or fractional?

Many investors use both: whole loans where they want control, and fractional loans to diversify across more properties.

Investing through a self-directed IRA

Trust deeds arranged by HanoverMC can be held in a self-directed IRA through a separate custodian. Hanover Mortgage Company does not act as custodian, so confirm the requirements with your custodian and tax advisor first. Self-directed IRA providers include uDirect IRA Services, Forge Trust, and Equity Trust Company; Hanover Mortgage Company has no affiliation with and does not endorse any of them.

What to check before investing

• The broker. Confirm the broker is licensed in California and ask about their history with past closed transactions.
• The lien position. A 1st is repaid before a 2nd or 3rd.
• The borrower's exit. How and when the loan is expected to be repaid.
• The title report. Confirm there are no unexpected liens ahead of your position.

Want to review a current loan against this checklist? Call (714) 838-1474 x 101 or visit the Investor Program page.

The risks that stay with every trust deed

Trust deeds are not insured or guaranteed, and interest is not guaranteed.

• Default. A borrower may stop paying or file for bankruptcy, which can lead to foreclosure, delays, and costs.
• Illiquidity. Your money is generally committed until the loan pays off.
• Property value. If values fall, the equity protecting your loan shrinks.
• Lien position. 2nd and 3rd trust deeds are repaid only after the loans ahead of them.
• Concentration. One large loan exposes you more than several smaller ones.

Past performance, including on past closed transactions Hanover Mortgage Company has arranged, is not a guarantee of future results.

Where Hanover Mortgage Company fits in

Hanover Mortgage Company/DBA HanoverMC is a private money mortgage company that arranges private, business-purpose real-estate financing throughout California through private trust-deed investors, including first-, second-, and third-trust-deed financing.

HanoverMC arranges business purpose 1st, 2nd, and 3rd trust deeds; it does not fund them. Owner-occupied properties can qualify when the loan is for a business purpose. Loans on owner-occupied properties can involve additional borrower protections and longer foreclosure timelines. Every loan goes through underwriting and closes on custom California loan documents prepared for that transaction. Hanover Mortgage Company generally considers financing up to 70% LTV on 1–4 unit properties and up to 65% LTV on commercial properties; land is evaluated case by case. When there is more than one loan on the property, the maximum is generally 65% CLTV.

← Previous: How a California Trust Deed Works

Frequently asked questions

Do I need to be an accredited investor to invest with Hanover MC?

Yes. Trust deed investments arranged by HanoverMC are available to accredited California resident investors only.

What is an accredited investor?

Someone who meets one of the SEC's tests, such as net worth over $1 million excluding a primary residence, or income over $200,000 individually or $300,000 jointly in each of the prior two years with the same expected this year.

What is the RE 870 questionnaire?

A California form used to review whether trust deed investing suits your finances.

Can I invest through my IRA?

Yes, through a self-directed IRA with a separate custodian. Hanover Mortgage Company does not act as custodian.

How do I see current loan opportunities?

Call (714) 838-1474 x 101 or visit the Investor Program page. Each available loan is presented with written disclosures for you to review before you decide.

Does Hanover Mortgage Company fund the loans?

No. HanoverMC arranges the loans; private trust deed investors provide the capital, on a whole or fractional basis.

Hanover Mortgage Company arranges private, business-purpose mortgage financing for property owners and investors throughout California, evaluated primarily on the asset and available equity rather than income or DTI. Lite documentation is required from every borrower. Hanover MC does not fund loans directly — capital comes from private trust deed investors, with financing arranged under Hanover Mortgage Company's California DRE broker license.

DISCLAIMER: Investments in trust deeds secured by one or more interests in real property are subject to risk of loss. Hanover Mortgage Company is California licensed only (California Department of Real Estate, Real Estate Broker). Hanover Mortgage Company is a Mortgage Broker; loans are arranged, not funded, by Hanover Mortgage Company. Mortgage Broker fees will apply unless stated otherwise. Money invested through a mortgage broker is not guaranteed to earn any interest or return and is not insured. State law dictates that we acknowledge that 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 • Are Not Bank Guaranteed • May Lose Value • Are Not a Deposit • Are Not Insured by Any Federal Government Agency. Investments arranged through Hanover Mortgage Company are not insured or guaranteed. All investments carry inherent risks, including the potential loss of principal. This article is general information, not legal or tax advice.