UCC Secured Promissory Note on LLC

[Angad G.]

Hi BP,

I have a close friend that would like to loan me money to use as working capital for my RE investments (I use the BRRR method mostly). Because I purchase in cash and am always re-financing properties with term loans once they are rented (usually 3 months post-closing) it does not make much sense to borrow money at the property level. If lending on individual properties, we would have to likely record 3/4 mortgages every year as properties are bought and refi'd.

One idea we had was to record a UCC-1 at the entity level for one of my LLCs. The entity owns 10 single family rentals which have a blanket loan  on them so the entity level lien would in essence encumber some of the equity in the properties. Has anyone ever used this structure? Thanks in advance!