Real Estate Agent · Baltimore (Dundalk), MD · Member since 2015 · 23 posts · 3 votes
What things should I do before I lend someone money for a flip? What paperwork should be filled out or filed to make it binding/legal or to protect myself against loosing it all with no recourse? What's a typical ROI percentage rate and time-frame on that return? Is there an article here on BP or anywhere I should read before lending any money to anyone?
Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes
10y
Vette the person as much as you can. Do you know him well? Has he done this before successfully? Is he honest and ethical? If all that checks out, then you create a deed of trust and record it. And a note that specifies terms of the loan (fees, points, interest, payment schedule and end date). You now have first position on the house. If he defaults on the loan you can get the house back.