New limitations for Private money investors in CA?

[Gene Hacker]

I have read that now its only legal to invest 10% of your liquid net worth in a trust deed in California. So if you want to buy a 100k trust deed you need to have a cool million in the bank. I have also read that you can't count real estate equity as part of your liquid net worth. You can buy multiple trust deeds but each must comprise less than 10% of your liquid net worth.

I am told this took effect on Jan 1st.

How are folks dealing with this? It seems like this will hit the small player hard.

Could be good for my area where RE values are much lower than most of CA. 80K is nothing in coastal CA but in my area of eastern Kern County it can buy a nice single family house that would make a great cash-flow rental even with the higher interest rate of a private loan.

[J Scott]

That seems pretty ridiculous to put limitations on where individuals can invest their money. I understand putting restrictions on the borrower (making it hard to solicit capital from non-accredited investors), but to limit investors from doing what they want just seems to go against some basic rights.