I am very new to BP and to real estate investment and it is intimating to come here to introduce myself. I am from the Bay Area looking to learn to invest in other more affordable markets. Olivia
I want to lend money to a friend for a real estate deal. Is it considered hard money landing? Is there an agreement or legal form that I need to sign with this friend to make sure that if things go wrong, I am protected? Thank you.
If you want to be an investor for your friend then you need to set down how much of equity you have in each and everything you put money into. Or form a LLC with them. IF you are just an angel investor then go to a lawyer and ask the questions on how to secure your money. You will need some sort of paperwork proving they owe you the money and at what interest rate that money is and what percent you get paid and when do you get paid back.
IF you have any further questions tag me and I will try to answer.
Hi @Olivia Le and welcome to BP. This is typically referred to as private money lending. The basic forms you’ll need are a promissory note and a deed of trust. Also, make sure your friend gets insurance on the property and that you (as the lender) are named as an additional loss payee on the policy.
It’s best to consult with an attorney to make sure your documents are legal and you’re fully covered. Even if the person you’re loaning money to is your friend.
Thank you for your responses and guidance. It seems the best course of action for me is to consult an attorney. Have a good day!
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