Private Lender Question

[Colby Litzenberger]

Hi all - 

I have a private lender that told me to write out a proposal for her to be my bank on my first investment.  I have a question for BP.  I would like to use the private money to purchase the property and fund part of the rehab.  I am wondering how I structure the deal since the backing for the loan will be the property?  

Since I will be paying cash for the property I will need that on hand in order to make the purchase, but I wouldn't ask her to give me any cash if there isn't a property to back up her loan.  I know I am over thinking this, but I can't get it straight in my head.  I would appreciate if anyone could help a newbie out...