Investor · North Ridgeville, OH · Member since 2017 · 45 posts · 26 votes
Getting ready to borrow money from a private lender. Private lender wants me to draw the paperwork up and send to him. Does anyone have a good example of what to use? 20k loan on a 26k rental property.
I am in a very similar situation and am looking for a rough framework to start from. Im thinking about utilizing a joint Venture Agreement/Promissory note. I set up LLC's for each property so I will be insulated, whether my investor decides to do so or not is their call. Check this post out, it was helpful for me:
I am in a very similar situation and am looking for a rough framework to start from. Im thinking about utilizing a joint Venture Agreement/Promissory note. I set up LLC's for each property so I will be insulated, whether my investor decides to do so or not is their call. Check this post out, it was helpful for me:
I use a simple promissory note for the loan, and then file the mortgage for them to document the security position. That's it. Ma simple loan with the rental property as the collateral.
I dont know how you do it in Ohio, but I always close with a title company. The title company contracts or has their own attorney that draws up the documents. I typed up a "loan commitment" form that I use with my private lenders. It has everyone's name, address and information. It also has the terms: interest rate, loan amount, balloon after 1 year or 5 years or whatever, if there are points, etc. They will draw up documents based on the loan commitment that my lender gave them. Even though the lender gives them this document, I collect the info from everyone and make sure the lender gets it to the title company.
When the title company gets the loan commitment, they contact the lender to verify the details. The title company gets the paperwork drawn up for the closing. They can send the paperwork to the lender a few days before the closing for the lender to verify or have their attorney make sure everything is ok.