The excuse contractors always give is that they need the funds for materials.

Their only involvement will be funding the project. 

The funds are deposited electronically each month.  

Quote from @Mike Klarman: Virginia, I would love to hear about a deal or two that you funded. 

Does buying all cash not make your return lower than just sticking it in a S&P index fund?  

They are farily easy and do nto require much to get started and the Max LTV is going to be 75% but I have seen some exceptions to 80%.Rates are subject to a few thing like loan amount, property type, number of units, credit score and downpayment.DSCR allows you to purchase with No employment and No tax returns so its a little easier. 

It depends on the LTV, type of loan, whether it is rate and term or cash out refi, and some other details, but that's not crazy.

I have been investing in trust deeds for over a decade and will continue to do so because I believe this is one of the best ways to invest your retirement funds.

Quote from @Christine Song: Has anyone invested in AAA Storage growth fund or PassiveStorage.com?

Personally I don't think this lends itself well to the fund model.