How would you structure this private money deal

[Kevin McCann]

Hello All

I have private money (family and im ok with that) for a deal i have a offer in on $58k purchase $35k rehab $140k-$145k ARV and PM will fund 100% with only a 18mo promissory note. I am looking to BRRRR this Property. Here is where i need help, the PM does not want there name on any thing in fear of being sued buy tenants. How could i structure this to protect both our interests? How can i cash out refinance without a mortgage on the property? Any help would be greatly appreciated!!

[Jessica Zolotorofe]

You don't need a mortgage on a property to cash out refi, you just need sufficient equity in the property. If I was the lender, I would never lend on a property without a mortgage. The only person with liability to tenants is the person on the deed, not on the mortgage. A mortgage is just a security interest to make sure that you can't sell the property without paying the loan back. Just like if a contractor put a mechanic's lien on the property, they wouldn't have liability to a tenant of the property. I have zero idea why her lawyer would require her to set up an LLC, other than to get extra legal fees to form one, and (if you have read any of my past posts, this will be pretty obvious) I am a MAJOR advocate for forming LLCs for protection, but I just don't see the need here. A lender is not subject to liability just by taking a mortgage if you have the documents drafted properly. Provide a full indemnity and offer to add your family member to your insurance policy as additional insured, if that makes them feel better.