Private loan tied to Property

[Nicholas Mann]

Hey all,

Not sure if this is the right place to post this. But I’ve recently been in contact with a friend who would like me to basically lend private money tied to a property. The home was a flip project that was seller financed and now the seller wants his money out of the deal. I would in turn invest “x” amount of capital and get paid back 10% interest until the property sells. Will equal about $200 a month. Length of the loan is 12 months. I could be wrong but the way it was explained is that i would have the “note” to the Property or would be able to foreclose if the borrower didn’t not pay back. I will have an attorney look it over before signing anything but I was just wondering what people on the forums had to say about this.

Thanks for any help

[Chris Seveney]

All great comments. Few more:

1. Make sure it is also a commercial note. 

2.If its in an LLC, make sure it has personal guaranty language

3. Make sure YOUR attorney drafts it not theirs.

4. As others mention get title report and confirm first positio

5. If he is renovating it, have him provide the lien waivers from the subcontractors showing they have been paid. 

6. Have confession of judgment language and assignment of rents as well in the note or deed of trust.