Wrong Wrong WrongWe do not read documents, as Randy mentionWe have a note that the bank gave us which is a promise to pay and spells out the terms of how the loan is to be paid.We gave a mortgage for the amount of the loan to the bank, which us a security instrument to ensure the bank has the house as collateral to  get paid back.Talk to a attorney hi still need to do the title.

That way you might cross collateralize without taking cash out of the first investment.These are the major risks of doing all cash.  

Here is how most work:Rates: 10% to 14% (Most Deals are 12%)Terms: 1 Day - 24 Months (Most Deals are 6 months)Fees: 3-5 points(%) of loan amount (Most Deals are 3 points(%)) - $2500 minimum fee Minimum Loan Amount: $75,000 Max Loan: 65-70% of After Repair Value(ARV) 100% Rehab Financing Available (Most Deals require 10-20% of purchase price down or cross-collateral)Closing Timeframe: 48 Hours - 3 Weeks (Most Deals are 7-10 business days)NO PRIMARY RESIDENCES, NON-OWNER OCCUPIED ONLY, BUSINESS AND COMMERCIAL USE ONLY.

I don't own my own home that I can put up as collateral.  

Scary thought - all of my previous fears could come true, and US credit can get downgraded again, compounding the rise in rates.You don't have to think too hard about this one - Fundamentally, do I think that my friend who makes $200K per year, with an 820 credit score, and who owns a nice house with 25% down payment and $750K mortgage collateralized by a property worth $1M is more likely to pay me back over the next 10-30 years? 

maybe you can find a lender who will allow you to put the equity in those units as collateral for the down payment?  

Contractors don't like doing this type of jobs, because the outcome is uncertain and they may get blamed for collateral damages.

Explore with your favorite lending institution the possibility of borrowing against those securities, realizing that if they go down in value you may have an issue with the lender as far as collateral is concerned.

Since we don’t shop our deals, we can do cross collateralization with our bank.  

Depending upon the equity you have in your home, that could be one strategy -- use the equity on your existing home or homes as collateral for your construction project.