Private Lenders - All in First Position?

[Kenneth Reimer]

Hello,

I'm curious how to structure multiple private lenders. If three private investors all come in as debt to buy a fixer all cash, can you structure such that they are all in first position?

Thanks in advance!

[Jay Hinrichs]

Originally posted by @Chris Seveney:

@Kenneth Reimer

You would need to do it as a fund or an LLC whereby they are active in the management of company and operating agreement states how money is returned

Technically you cannot have all in first but if there was a shortage one would not get nothing.

Make sense?

 actually in CA you are able to fractionlize deeds of trust its how much of private/ hml is done in that state.  what a fractionlized TD is you compared to tenants in common ..  so the beneficial interest in the DT would read..    Jay to 40%  Joe to 30% and Steve to 30%  so each are investors in first position. 

you simply need  ( like me ) a CA real estate broker to do the very simple paper work and disclosures.. 

you can do as suggested and put them into title as co owners of a LLC or as tenants in common.

But if you want to retain title yourself and bring in debt thats how you do it in CA. 

Some states its illegal to fractionalize DT or mortgages Like Oregon is not legal but other states it is legal.. Check what state your in and for easy double check just ask a good experienced Escrow officer if they see any of these  or if its an attorney closing state they will know off the top of their head.