Help in structuring a loan

[Mark Bondurant]

I'm looking for assistance in structuring a loan of $10K from my self-directed IRA to another REIA newbie member. (I am totally new at lending). Loan is on a triplex: a commercial space that rents at $550/mo. (currently rented month by month) , a 1/1 that rents at $750/mo. and a 3/2 that rents at $1,200/mo. Market value is $300K.

Buyer is putting $20K down and seller is financing the $200K as a 7-year note: Payments are $500/mo. the first four years and $667/mo for years 5 and 6.

So my $10K loan would be in second position.

How do I set this up so I am covered in case of default?

Many thanks! Mark

[Larry Bowers]

Mark, I am not answering your question, but this may be helpful since you're new to lending. There is a document you can record at the courthouse that will notify you if there is an attempt to foreclose by the first position lienholder. Just ask an attorney about it.