Personal Loan Question

[Jonathan Wheeler]

Hello yall, 

What is the best way to make/format a loan if there is no physical property attached to it. For example, giving a loan of $15,000 toward the repairs or purchase of a potential property? What type of contract would you draw up for this scenario?

Do you have an example?

I think I worded that properly lol.

[Kevin Siedlecki]

@Jonathan Wheeler.  I'm not a lawyer or CPA, the following is just from my experience.

If it's for repairs, or a house that you are going to buy with cash, you can just have a lawyer write up an unsecured loan agreement with whatever terms you agree to. That's very simple.

If it's for the purchase of a property that is going to be financed, that's a lot more complicated. My bank would not let me use money from an unsecured loan as part of a downpayment, but they would let me use money from a secured loan. Of course, that goes against your personal DTI and portfolio LTV, so you have to make sure you'll still qualify for the bank's loan when the private loan is factored in.

Hope that helps!