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Updated over 1 year ago on . Most recent reply
Private Lending Advice
Hello, I came across an opportunity to invest/ private lend on a fix and flip. The annual return rate is good and time-frame works for me.
My questions are;
1) what are the type of documents I should expect to receive during the contractual process? Promissory note, grant deed etc.
2) should I setup an LLC for tax purposes or other benefits of LLC vs personal?
Thanks in advance.
Most Popular Reply

Talk to a LAWYER who drafts docs for these types of transactions, licensed in the state where the property is located.
Most private lenders I've worked with forego a loan agreement, but could be useful when there is a lot of complexity. Most only use either a personal guarantee OR a business purpose affidavit, but not both. If they are borrowing in their personal name, it already is a guarantee for that person. If the borrower is an entity, no need for a business purpose affidavit. In Texas, we can put a vendor's lien in the warranty deed.
Again, check with a lawyer in the state where the property is located, because that is the law that controls.