This is my first time loaning a large amount of money, and I would like everything to go a smooth as possible. I have an agreement with my Dad that I’ll receive 10% return on my investment upon the sale of the house. It seems very straight forward and simple. I assume I can find a template online and fill in the blanks. So my question is, is it this simple? And does anybody have any advise.
Put a mortgage on the property, use an attorney and/or a title company. Consider a draw schedule if appropriate. Consider it a gift, expect not to get it back and be pleasantly surprised if you get anything returned.
I vote "Consider it a gift, expect not to get it back and be pleasantly surprised if you get anything returned." as the best comment of January. So true! :)
There are several ways you could do this, some good, many bad.
All the good ways start with an attorney and include a title company with either a mortgage or a trust deed.
You really should secure your position with some kind of encumbrance on the title. Family is family, but money is money too. Find a real estate attorney that knows hard money lending.
Thanks for replying Carl, I didn’t know that anybody could put a mortgage on a property. That sounds like a solid way to protect my investment.
@Luis Felix your welcome
Thanks guys, I’m glad I asked.
What it sounds like you want is to provide your father with a mortgage: a loan that is secured by property he owns. As others have suggested, you should contact a real estate attorney, particularly one that has experience with drafting loans (called "promissory notes") secured by mortgages (here in California we call it a "deed of trust").
And get a subordination clause so your loan will have 1st position.
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