Lack of liquidity: Trust deed investments are generally illiquid, meaning that it can be difficult to sell the investment quickly if you need access to your funds.

Default risk: There is always a risk that the borrower may default on the loan, which can result in a loss of principal and interest.

Market risk: The real estate market can be volatile, and changes in market conditions can affect the value and performance of trust deed investments.

Regulatory risks: The laws and regulations governing trust deed investments can vary by state and can be complex. This can create additional risks and costs for investors.

No FDIC insurance: Unlike bank deposits, trust deed investments are not insured by the FDIC. This means that if the borrower defaults, you could lose some or all of your investment.

Limited control: As an investor in a trust deed, you have limited control over the loan terms and the borrower’s actions. This can make it harder to mitigate risks or adjust the investment strategy.

Legal process: In the event of a default, the foreclosure process can be lengthy and costly. This can create additional risks and expenses for the investor.