Promissory Note or Deed of Trust - which is better to sign?

[Jaxi West]

Hi

Investing with a guy who needs the money to rehab a house. Not a super large amount.
Deed of Trust ties me to the house/title. I am a silent owner until the work is done and we file with the title company for a reconveyance to clear the title again.
The Promissory Note does not tie me to the house (just like lending to a friend) but it does provide a clause that covers my legal expenses should I need to take action against the guy.

I am thinking the Promissory note is better because I am concerned about being tied to the house directly in any way. Am I being too cautious on this? Like is it not that big of a deal to sign a Deed of Trust when providing money for rehab work? What do most do?

btw: I totally get and respect why the Deed of Trust is used - it ties money specifically to one house so it's cleaner record keeping/accounting and just more an organized way of doing it for the person who is asking for the money.

I don't doubt the guy - I wouldn't invest with him if I had doubts about him finishing the work or paying or anything, I just want to cover myself with the best legal document.

So which document would you go with?

Jaxi

[J Scott]

It's typical on a secured real estate loan that you have both a promissory note *AND* a deed of trust (or mortgage).

The promissory note is his contract for the debt. The deed of trust is essentially his collateral against that contract.