Generating Passive Income Without Being a Landlord: The Trust Deed Investment Advantage

By John Lloyd, CEO, Fidelis Private Fund

For many successful investors, the allure of real estate is undeniable. We are drawn to the tangibility of it—the idea of owning a piece of the earth that generates consistent cash flow. Yet, there is a common point in an investor’s journey where the reality of property ownership begins to clash with the desire for peace of mind.

You might know the feeling: the “knot in the stomach” when a major tenant vacates, the unexpected $50,000 roof replacement that evaporates a year’s worth of profit, or the relentless “triple threat” of tenants, toilets, and trash. At a certain level of wealth, you no longer want to manage a portfolio; you want your portfolio to support your life. You seek real estate exposure, but you want to shed the operational headaches.

This is where the distinction between Equity and Debt becomes the most important tool in your arsenal for Capital Preservation.

The Shift from Landlord to Lender

When you own a property (equity), you are at the bottom of the capital stack. You take the most risk for the potential of the highest reward, but you also bear every “CapEx” burden and operational risk. When you invest in a Trust Deed (debt), you effectively move to the top of the stack. You become the bank.

A Trust Deed investment is a loan secured by real estate. Instead of waiting for a property to appreciate or for a tenant to pay rent so you can see a dividend, you receive Fixed Income based on the interest paid by the borrower. Because these loans are typically short-term and secured by a deed of trust on the property, your investment is protected by a “protective equity” cushion. If a borrower defaults, the property itself serves as the collateral to return your capital.

In today’s market, where interest rates have reset and equity markets remain volatile, the ability to capture high-yield passive income without the unpredictability of property management is a significant advantage.

The Fidelis Way: Stewardship Through Precision

At Fidelis Private Fund, we view ourselves as more than just a fund; we are stewards of your capital. Our approach to trust deed investing is built on a foundation of relationship-driven underwriting. We don’t just look at spreadsheets; we look at the people and the projects behind them.

Our strategy is designed to protect your wealth first and generate yield second. Here is how we maintain that balance:

• Precision in Underwriting: We handle the “front end” of the process with clinical focus. Fidelis originates and underwrites every loan ourselves. We don’t outsource the decision-making. We vet the borrower’s track record, the property’s value, and the viability of the exit strategy. By making the lending decisions in-house, we ensure every loan meets our strict “Protector First” standards.
• Operational Integrity: To ensure the highest level of transparency and compliance, while we make the credit decisions, the ongoing loan servicing is handled by a trusted third-party loan servicer. This provides an essential layer of professional oversight, ensuring that payments are collected, tax reporting is accurate, and the “boring” but vital back-office work is handled with institutional-grade accuracy.
• Capital Preservation: We focus on low Loan-to-Value (LTV) ratios. This means there is a significant buffer of equity provided by the borrower that protects your principal. If the market shifts, that cushion is what keeps your investment secure.

Moving Forward

The transition from active landlord to passive lender is often the most liberating move an accredited investor can make. It allows you to stay connected to the real estate market while regaining the one asset you can’t buy more of: your time.

I have always believed that the best investment partnerships are built on transparency and direct communication. I don’t believe in gatekeepers or corporate layers. If you are curious about how trust deed investing could simplify your portfolio while maintaining—or even increasing—your yield, the best way to start is just to reach out.

I answer my own phone, and I’d love to hear your story and discuss how we can help protect and grow your capital. You can contact me directly, John Lloyd, at 760-258-4486 or email me at jlloyd@fidelispf.com.