The equity guy gets equity, the debt guy get's debt but will likely want some form of collateral to his loan.

I am not even sure what a worthless second would fetch on the open market or why you'd be interested in buying a non collateraled note?

The Deed to Secure Debt (DSD) -- this is the document that attaches the property to the loan as collateral...if the borrower defaults on the loan, you get to foreclose on the property.Both of these documents are pretty standardized, and my closing attorney will draw them up every time I borrow money for a property from a private lender (unless the lender wants to have his attorney provide the documents, which would cost the lender money, but might make him feel more secure).

And If I need to, since my personal vehical is already paid for it is worth $10,000 and I could use it as collateral for $8500 as my current bank will pay out 85% of a vehicles value.

you may be able to refi and retitle at the same time to get these but Fannie won't finance in the LLCs name.One suggestion is rather than a cash out refi (which requires a closing and new title insurance) you could find a portfolio lender that will let you pledge your equity in the properties (usually up to 80% or so) as collateral for the new purchases.

The goal being that instead of my cash sitting in an online savings account earning 1% while we pay the bank 5.125%, I would basically become the bank and the LLC would be making payments to me after I pay off the existing loans and issue a new loan from me to the LLC with the property as collateral (i.e.

Question to you all.I have two single family non owner that I want to refi and do a cash out both are cash flowing one big bank said they do not really do rental property funding the other wants to know what I'm doing with the money, never heard this before in any event I owe between the two 120K comps are around 280K combined they are tied together now because when I bought them they used one for collateral and now I want to have them stand on there own with separate mortgages, I'm in Ohio can anyone help this situation.Alan 

I am not certain I would personally be comfortable with using my primary residence as funds/collateral in this manner.  

To conserve your cash, always ask for some subordinated financing (owner financing that is in second place), also negotiate substitution of collateral and discount for early pay off clause in the mortgage document.

Keep her off and I think you would be ok.MarkShe may not have signed, but their assets they own jointly are probably collateral.