To mitigate a loss of the funds I've proposed a trust deed against the property as the instrument to secure the loan.

Bill Gulley might want to comment, Dodd Frank is about owner occupant seller financing, lease options if rent credits are used could be construed as a financing instrument, if subtracted from the option price.

Those instruments direct default toward the state non-judicial process if that state allows it.

A secured debt is one in which you sign an instrument (such as a mortgage, deed of trust, or land contract) that: Makes your ownership in a qualified home security for payment of the debt, Provides, in case of default, that your home could satisfy the debt, and Is recorded or is otherwise perfected under any state or local law that applies.

So thank you for all the responses, you were all instrumental in the solution I chose!

(d) A lender may not exercise its option pursuant to a due-on-sale clause upon--, (1) the creation of a lien or other encumbrance subordinate to the lender's security instrument which does not relate to a transfer of rights of occupancy in the property; (2) the creation of a purchase money security interest for household appliances; (3) a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety; (4) the granting of a leasehold interest of three years or less not containing an option to purchase; (5) a transfer to a relative resulting from the death of a borrower; (6) a transfer where the spouse or children of the borrower become an owner of the property; (7) a transfer resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement, by which the spouse of the borrower becomes an owner of the property; (8) a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property; or (9) any other transfer or disposition described in regulations prescribed by the Federal Home Loan Bank Board.

Just think that you're competing with every other financial instrument for the money for the limited set of individuals who are accredited for the capital raise. 

I suggest using a Texas Instrument BAII financial calculator, much quicker for me.

The noteholder can go after the collateral itself (the property) since  believe that the note and security instrument survive the BK intact.

Brandon,Priority in title is determined by time of instrument recording and what, if anything, is prior in time to that event.