Secure Money as Hard Money Lender

[Jonathan Frausto]

Whats up BP

There's a new investor that brought a deal to me to see if I can finance it. My question is, if I'm going to be the HML in this project, how do I LEGALLY secure my money in the property? How do other HML do it? Do I write my name on the deed? How do you guys structure the deal?

Any feedback would be greatly appreciated

Thanks guys!

Jonathan

[Matthew Perry]

The answer depends on what side of the HML spectrum you want to exist on. Yes, to drill down to the simplest form have an attorney draw up mortgage documents that would protect you and given you the first lien in the event that things take a horrible turn and you are left not only holding the bill but also a half finished product that you can turn and sell to someone else or finish yourself to recoup your money. Are you looking for share of profits? Interest only? Combination of both? Are you charging origination points upfront? Is there a balloon payment or are you allowing everything to be rolled in at once in terms of payment back? As I said the thing about HML is trying to decide what side you want to spectrum you want to be on and how creative you want to be-