New to Obtaining Private Lending in El Paso, Texas

6 Replies

After reaching out to my inner circle of family and friends, I've already received interest from numerous people potentially willing to be my private money lenders. I've never done this before and after reading some related BP posts, I still do not know what the best answer is. Do I have to go to an attorney? Can I go straight to the title company? Any book suggestions? I appreciate any guidance or advice on this, thank you!


I would use a real estate attorney to have these contracts drawn up. Preferably one that has past experience writing private notes and deeds of trust.  

@Samuel Gutierrez Since it's a private lender you can have an attorney write a promissory note for the loan. This has nothing to do with the title company unless you want the lender to go on the deed and on record as being a lender. The easiest way is to figure out the terms with the private party then put it in writing. Once the property is ready to be funded, the private party wires in the funds and you are on your way. Don't over think it.  

Hey @Samuel Gutierrez You absolutely want to record the deed of trust. You want your lender to absolutely be secured by the property if for any reason you do not perform, they can take the property back as collateral(foreclose on you).

When you have a contract on a property, you can let your title agent know that you are going to get a loan from a friend. They will ask if you want them to get the deed of trust drawn up. You can have your own attorney do it or you can use one that the title company contracts with. Title company is already going to use an attorney for the deed and any other legal documents. It is the cheapest route to use their attorney. Deeds of trust are pretty basic. Just tell the title company what you and your lender have talked about as far as term, interest rate, payments, etc. They will take care of it for you.

@Samuel Gutierrez 100%

They want to be guaranteed that you pay them back. If there is a lien on the property, it sure gives you motivation to pay them back according to the terms of the agreement. If the loan is NOT secured by the property, why pay them back?? What are they going to do, be mad?? They have no recourse against you. They can sue you, maybe get a judgement.

I would imagine that there is some TI or Tenant Improvements if it is a commercial building that you want to get done. Any bank would do the same. They would put a 2nd on the property or refinance you with the TI rolled into the loan.

You want to make sure that the lender feels safe because he is safe if there is an issue with you performing.