I have an existing  Note (Note 1) secured by a deed of trust in California on a  SFR (property 1).The borrower has agreed to bring in additional property  (Property 2)as a collateral  after Note 1 is completed  as a cross collateral.I will be recording a deed of trust as a cross collateral on property 2. 

Also, most banks will do a LOC using multiple properties as collateral. 

The chosen lender will pre-underwrite your loan to evaluate the risks related to your credit, capacity, and the condition of your collateral.

Hey DeAnna, you could do a line of credit with the properties or possibly the entire portfolio as collateral.  

A Note doesn’t recorded, an executed Mortgage document gets recorded….otherwise the lender has no security/collateral. 

I say that as some HMLs are strictly collateral-based and thus need you to have a property identified first.

@Jennie Seitz either go three separate loans or commercial with very clear collateral release provisions.

Is there away to buy the property and still let the owner use it as collateral for her to stay in the nursing home? 

If so, there's the possibility that you could tap into the equity of those properties to secure a loan for the down payment; or, similarly, you could offer the other property as collateral for the seller themselves to be secured for a second loan as your down payment.  

They have better collateral and you are able to utilize your funds for renovations instead of the down payment.