I need some advice about a hard money deal I'm working on.

[Greg Kimura]

Sorry, this is a repost - I had a bad title on the last one.  Here goes:

Hi Everyone,

I'm new to this site and I was looking for help to do a hard money loan. I have lent money to friends and family in the past and after the last debacle, I was told that I should have a lien position behind the first mortgage. I have no idea how to do this.

Here is the information on the loan: My sister has a house that she would like to get a second mortgage on. The banks won't lend money to her, due to her debt to income. I have some extra funds and I want to help her. I know it sounds crazy, but I've agreed to a 2% loan (under 10%) with everything due in a balloon payment in 5 years (interest and principle). I have the loan documents written up and I have the money ready to lend. I want to make sure I have a lien position under her first mortgage, just in case. Her first mortgage is for $75K, the house is worth $165K and I'm going to lend her 100K. I know it's more than the property is worth, but she's my sister and she needs the help.

And advice on what to do and how to do it. I'm trying to keep the expenses down.

Thank you.

Greg