I have been presented with a promissory note secured by real estate by a borrower, but I am very nervous about how to proceed with the drafted note provided by the borrower.Could you guys glance over this note and tell me if there is another note I should use or if I should spend the whopping $3,000 consultation with a real estate attorney.

Let me say thanks in advance to you who will read this discussion and participate and for those who will never read this discussion but have helped tremendously with their questions answers and insights in other discussions that ive consumed in a large clip for months before even joining BP as a member. 

But, no proceeds from a loan are not taxable.

So here is a question I have for you: If you sell the rental and use the proceeds to pay down your current mortgage, what capital will you be using for a future investment?

Once he's comfortable with the way the transactions are proceeding, (perhaps after a couple successful deals), then you could move to 50/50.I would suggest that your time may be better spent analyzing and doing the deals than personally doing the rehab work or managing the properties. 

However you proceed I would be very careful.

He is a friend of the family, so everyone told me not to worry and proceed (sorry, not going to happen).

Even if it is a legitimate referral still proceeds with caution.

Does seller have to be willing to give part of proceeds as commission???

We have 4 rentals total and will be selling the out of state home this summer and using the proceeds to buy more in Joliet.