Capstone Capital Partners, LLC | Capstone Fund, LLC

Frequently Asked Questions

Frequently Ask Questions

Q. What is a Trust Deed?

A Trust Deed or a Deed of Trust is a security instrument for real estate loans. In this case, the deed is a First Lien on a property. The particulars of the loan are detailed in a separate Promissory Note, and the Trust Deed is recorded at the county recorder’s office. The Trust Deed serves legal notice to the world that the subject property is pledged to secure a loan. It also provides an accelerated foreclosure should a borrower default on a loan. In short, its a mortgage loan secured on real estate just like a bank secures their funds to real estate.

Q. What is Private Lending?

Private Lending (aka Trust Deed Investing) is not a new concept. In fact, private funds have been the security for banks ever since people began taking out loans on real estate. With private lending, the lender/investor serves as the bank which funds the real estate loan. The collateral for the loan is the specific piece of real estate for which the loan is funded. In other words, the borrower’s property is the collateral for the loan and the debt is evidenced and secured by a deed of trust. The private lender’s name is reflected on the deed of trust and is recorded in the appropriate county to make the loan or debt public record making the investment fully transparent.

Q. What type of Properties do you Lend on?

Capstone lends primarily on Residential Properties such as the following:

Single Family Residence (SFR)



Capstone also lends on Commercial Properties such as the following:

Multi-Family (Apartments)


Retail Buildings

Land (at lower loan to values)

Q. How is my Investment Secure?

Every private lending transaction handled through our office will generally include the following:

  • Signed & Recorded Deed of Trust- An official signed document attaching the new loan to the property as a first lien. A recorded copy to follow once it’s received from title.
  • Signed Mortgage/Promissory Note- A personal commitment and guarantee from the borrower stating the specific loan terms to the private lender.
  • Title Insurance Policy- A full title policy insuring the lender’s first lien to the property from any unknown potential title issues and/or outstanding liens.
  • Hazard or Home Insurance Policy- A policy insuring the entire loan amount against fire or other potential disaster to the property.
  • Loan Servicing Agreement- An agreement to collect the mortgage payment as stated on the promissory note for the lender’s new loan and to act as a liaison between both the lender and the borrower.
  • Online Access- Every private lender receives a personal ID and Password and has online accessibility to their loan portfolio.
  • Ready to Invest Now? Please click here

Q. Who Borrows Private Money?

Real estate developers, builders, and investors are our borrowers. These borrowers are usually self-employed and savvy with real estate investing; however, they may not qualify or desire to qualify for conventional bank financing for various reasons (see below).

Q. Why Would a Borrower Pay Higher Rates and Costs?

Remember these are short-term bridge loans; borrowers are typically not shopping for the best price as much as they are seeking for more creative terms and a timely closing. There are really many variables as to why a borrower would pay a higher cost to get a private loan; however, we have identified two common reasons here:

1). Tightening of Credit– Our borrowers (many self-employed individuals) in many cases find it challenging to qualify with the currently more stringent bank guidelines and usually because they cannot prove consistent income and/or currently own too many properties they exceed conventional guidelines. The new Dodd Frank Laws make it harder for certain individuals to qualify. Because of this, we are seeing an increase in demand for private capital.

2). Convenience– For our borrowers it’s usually not the cost of the money that counts, but the ability to receive funds quickly. They use this speed of financing to negotiate better terms with sellers, especially when they can use financing that is not subject to the standard or red tape qualifying methods. Because these loans are short-term (6-24 months) and more attainable, borrowers are typically able to welcome the higher costs in exchange for the benefits.

Q. How much Capital do I need to Start Lending?

Our starting minimum is typically $100,000; however, we have made exceptions for lower amounts when getting comfortable with our lending program. Please know that we will work with most accredited investors; however, we typically prefer to work with individuals that are savvy & experienced in real estate investing and with available funds of $300,000 or more.

Q. What happens if a borrower does not pay on time?

Have you ever foreclosed on a property?

Yes, we have had a handful of foreclosures (to date) and they usually represent approximately 5% +/- of our total loans funded. Although foreclosures are typically rare (in a healthy real estate cycle), the lender should be able to recoup all of their investment in most cases. Please know that when a foreclosure does occur, we have solid measures in place to address the issue. We also have an experienced REO team that has been able to mitigate the risk of foreclosures when they do occur. There is generally a low probability of experiencing a loss to the principal when investing in deeds of trust, however, it can happen in certain cases especially when unexpected economic factors occur or values change for other reasons.

What are the company statistics?

Total Funding’s Since 2012:

$100,000,000+ (million)

Total Foreclosures:

Approximately 5% +/- of our portfolio

Current Average Annual Return:


Would you like us to send you examples of past fundings? Please click here. 

Q. When do the Interest Payments come in?

Capstone Servicing sends out the (timely collected) monthly interest payments to the private lender on the 20th of every month. The lender can choose ACH (Direct Deposit) into their checking account or simply receive a monthly check from our office. Every private lender has full transparency and private online access to their lending portfolio at the following link:
Lender Online Access

Q. How do I Qualify as an Investor?

To invest in our deed of trust lending program, we require you to be an Accredited Investor and a Texas Resident in addition to experience with real estate investing. If you are new to real estate investing or if you are not liquid with investment capital, this program is not for you. Please call us for more details or simply fill out the link here.

For an individual to be considered an accredited investor, they must have a net worth of at least one million US dollars, not including the value of their primary residence or have income of at least $200,000 each year for the last two years (or $300,000 together with their spouse if married) and have the expectation to make the same amount this year. If you are unsure if you qualify, please ask your CPA, Financial Planner or an Attorney.

Q. How do I start looking at Lending Opportunities?

If you would like to put your capital to work and start earning 8%-9% Annual Return on First Liens on Real Estate, please click the link below and our team will follow up with you.

To Get Started Click Here

Or if you have more questions, just call us or send us an email:

512-257-1330- Office

We like our investors to be fully informed on both the risks and rewards of investing in deeds of trust. Although this is NOT a Texas-specific disclosure, the link below gives you a comprehensive 3rd party look at this investment. This brochure was produced by the California Department of Real Estate and it specifically covers- Trust Deed Investing. This link will take you to another site.

Disclaimer: This does not constitute an offer to sell or a solicitation of an offer to purchase any security. Any prospective investor is advised to consult their legal, financial, and tax advisors prior to making any investment decisions. Texas residents only. Capstone Capital Partners, LLC (Capstone) does not guarantee projected returns and past performance does not guarantee future success. This is not an offer to sell or a solicitation for an investment into Capstone Capital Partners, LLC (Capstone). Capstone has not registered these notes as securities and does not intend to in the future. Capstone is relying upon the private offering exemption as well as exemptions in Section 5.J of the Texas Securities Act and Section 3(a)(11) and Rule 147 of the Securities Act of 1933 as well as other exemptions not specifically described in this disclaimer.

We have a 3rd party (sister company) loan servicing company (Capstone Servicing) that handles all of the aspects of loan servicing including collections, defaults, and even foreclosures. Capstone Servicing has a high-tech loan servicing software program (similar to those of banks). When a borrower does not make a timely payment, Capstone Servicing personally reaches out to the borrower in efforts to cure the delinquency. In most cases this personal contact resolves the late payment; typically we find delinquencies are caused by inconsequential reasons such as the borrower being out of town, etc. However, when a borrower is truly delinquent and not responding to communication efforts the default process begins. This process takes approximately 2-3 months to set the property up for a potential foreclosure to take place. Ready to Invest Now? Please click here. 

“Each person at Capstone treats me with respect, friendliness, and professionalism. I appreciate not only the returns that are being made on my investment, but also that all is done from a perspective of good, Godly stewardship”

P. Horton

Read More

Learn more about to earn 8%-9% Annual Return on Real Estate

Our Investment Packet outlines properties that we have funded, how we underwrite the loans, including the overall process and testimonials from other investors.

Free Investment Packet