First Time Hard Money lender with questions
I am looking to loan some money to an investor to flip a SFH and am looking for some of the details regarding documents required in Illinois. Let me say, i am a seasoned investor with about 20 years investing in SFH and currently own about 75 SFH. About a third are paid off and my reserves and bank accounts allow me to loan some money without jeopardizing my business.
I am a leading member of my local REIA and have met with someone from the group who has flipped abut 6-7 houses and is interested in working with me on her next flip. The SFH she is looking at is only 2 blocks from one of my current rentals so I am familiar with the area and really like it. She is looking to borrow about 60% of ARV and the rehab costs are maybe 10% of the ARV, (which she has on hand so only needs to borrow for the original purchase costs). She is looking at a turnover of about 3 months from purchase to sale where she will pay off the original purchase price.
We have discussed the origination costs and monthly interest only payments and I think we are good to go.
My questions are; Besides a note stating the SFH as collateral, what documents do I need to protect myself should this go south.
This is my first attempt at Hard Money lending and others have inquired of me but I want to get this under my belt first.
Thanks for any and all help you can provide.