I'm a real estate investor in Philadelphia, PA seeking to expand my business. I enjoy doing complete rehabs but I only do a few per year due to the limited access of cash. I am interested in learning about the types of documents that are needed for private money lending for both the borrower and lender. In addition, I would like to know about the kind of information needed in a presentation or packet to potential lenders. Any information you are willing to share is appreciated.
Only two documents are needed for a loan: a Promissory Note and a Mortgage. The note spells out the terms of the loan and the mortgage (which should be recorded to protect the lender) allows the lender to foreclose on the house to reclaim his funds if necessary. Make sure you use forms that are specific to your State as there are many differences between States.
It is always safest to have an attorney review the forms to make sure they are appropriate for your purposes. (This service is inexpensive if you subscribe to a pre paid legal service--I can give you a link to the one I use if you send me a PM and ask for it).
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