The bonds that were derivatives of real mortgage bonds had nothing in them but junk, if anything at all (called CDOs - derivative vs CMOs - real collateral)We can't confuse the mortgage bonding and selling that goes on now with what happened from 01-07.

One of my co-worker said that I need to have a clear lending contract stated that "the rental house is the collateral" in order to consider this as mortgage interest.  

Do you have a lender than can use them purely as collateral as downpayment like a second lien, or were you planning just to liquidate everything you had as soon as the offer was accepted.

It was just easier than hard money because there is no collateral or paperwork.

My thought was to purchase the land with cash and to use the land as collateral for a construction loan.    

There are definitely banks that will do a cross collateral loan that allows you to leverage your two properties within the state.

NEVER pay advance fees with the exception of an appraisal.HML look for 3 things:1. capacity to repay2. character of the borrower (do they pay their bills)3. collateral valueMost HML wont want to do such a small loan.

Is there another platform that offers similar content and collateral?

I'm assuming that most notes are collateralized against the property, I'd like to keep it separate but still make it legal so the seller receives his portion within the time he wanted.

Nor can your IRA be used as collateral for a loan you take out in your own name.