Rental Property Investor · Portland, OR · Member since 2017 · 29 posts · 7 votes
Looking for real estate attorney. Must be well versed in creating private lender contracts and have knowledge around all of the complexities of that. Thanks!
Check out Hennessy, Reeves, Khan, and Elkins or Shawn Morgan. It’ll be helpful for you to have all your terms of the deal laid out so that they just need to plug in play on a Prom Note and Trust Deed. It’ll save you a lot of money as well.
@Neal Collins and @Brad Hammond thanks so much! I'll check out Shawn first. And yes, I'll have all of the terms laid out. This is the first time I've ever used a private money lender and done a contract like this. While I have you on the horn, I'd welcome any advice you have about how to handle it. No presh. Here is what I have going on though:
I have 3 lenders lines up.
One of them is going to fund the bulk of cash needed. 80% of ARV. He has agreed to offer me a private money loan at 10%. With one balloon payment after 6 months. He asked to have collateral on his loan. He doesn't know much about this sort of stuff. Based on my research, it seems like tying the Prom note to the deed of trust is the way, yes?
The other two lenders are lending me smaller amounts to cover the rest. One of them asked for some sort of collateral in case I die, get sick etc. I don't want to have 2 liens on the house. So I'm not sure what to offer her except what's in the standard prom note regarding legally needing to pay, the note being passed to my heirs, etc. Any advice there?
You’re basically setting up private mortgages. We do these all the time.
You’ll need a promissory note and a deed of trust for each lien you want to create.
You could give the 3rd lender a promissory note and an unrecorded deed of trust (which doesn’t lien the house, until it’s recorded) as a type of collateral. You could have an agreement that as long as you kept all the payment terms it would remain unrecorded.
@Chris Shepard Thank you that helps man! I think the unrecorded DOT is the way to go. Oh we met at the Portland meet up, right? You gave the talk? : ) Great to meet you.