Protecting the 2nd Lienholder Position
I'm looking to get private money lenders to loan the down payment for my hard money loans (to do flips), but I'm wondering if that puts them at a significant risk. I'd like to know how I can best protect my private lenders.
I know that if a foreclosure happens, the 1st can wipe out the 2nd. This makes me wonder what's the point of "securing" a loan with 2nd (or more) position on a property. But I know a hard money lender that has put their money into a deal as a 9th... so they must have thought they'd at least get their money back.
Also, is the foreclosure process the only way the 1st can take control of a property (in case the deal goes south)? If I just had a single private money lender on a 1st, how easy is it for them to go through that process to acquire the property?
