Private Money Loans

[Nicholas S.]

This is what I need help with. I am trying to purchase properties using Private Money(not hard money loan) in CA.
First, I am trying to find a good note template for a private loan specifically used to purchase real estate(I don't know if that matters, but most of the templates/samples I have looked at aren't structured in the way people have described them to me). I would like it to last for X number of months at Y annual interest and it would allow me to pay back the full loan at any time. It would also provide the purchased property as collateral, if I default on the loan.
Also, I don't understand how the loan would be execute, I mean specifically, How does the money get from the lender to me, and from me to the purchase of the property. As I understand, it all happens at the closing of the property. But, that is about as far as my understanding goes. How should the purchase be structured? What needs to be in the purchase agreement to tie it to the loan note and to protect me and my lender.
This is a little more general to my overall strategy, but I plan on using one of these three exit strategies after purchasing the property: Flip, Rent, or Lease Option. I am targeting SFR/Condos within 60k-100k price range.
If there is anything else I might be missing, please tell me.
Thank you so much,
Nicholas Spinner

[Jon Holdman]

The mechanics are simple. Almost all real estate transactions involve a loan, so this is a well understood process.

A title company handles the process. There are three parties, buyer, seller, and lender. The buyer and seller agree on the sale and formalize that with the purchase and sale agreement. That goes to the title company. The buyer and lender agree on loan terms. There would typically be three documents involved - a deed, a deed of trust and a promissory note. The deed is granted by the seller (grantor) to the buyer (grantee) and conveys ownership. The deed of trust is granted by the borrower (buyer aka grantor) to the lender (grantee) and gives the lender a security interest in the property. Both of these get recorded with the county. The promissory note is between the buyer/borrower and lender and spells out the terms of the loan.

A title company might have samples of these document. You might be able to find them from another investor, though I would find someone who's done similar transactions in your area. You can also have a lawyer draw them up. Deeds are quite standard, deeds of trust and promissory notes less so.

All the docs go to the title company. The lender wires the money to the title company. You wire or being in a cashiers check. The title company completes all the paperwork (there will be a bunch of other docs, most likely) and passes out checks.