Mark: Okay, another question. Matt in Portland Oregon. “When I have a private lender that wants to invest with our company, what are the necessary forms I need to show their return and set up the whole process professionally?”

Justin: Okay, so Portland Oregon. I’m not sure if you guys are a deed of trust state, but basically you have your promissory note. You have your deed of trust, or mortgage. Your promissory note is basically your agreement, your contract, that’s going to lay out the terms that you’re going to use, what percentage interest rate you’re paying them, how long the note is for.

If we think we can flip a property in four months, we want the note to be nine months. We’ll pay them back sooner, of course, if we’re not keeping the money going, but we do the note for longer just in case anything happens. We need to go longer, right?

So you’ve got your note, you’ve have your deed of trust or mortgage, which are the same thing. Those are the documents that you need. There’s not really anything else that you need there than you want to make sure that you get insurance, and they’re additionally insured. So I would just explain all those things, your note, your deed-of-trust, or mortgage, which are the same thing. Those are the documents that you need.

I mean, there’s not really anything else you need other than you want to make sure you get insurance, and they’re additionally insured. So i would just explain all of those things to them, and I would also explain that you’re going to make sure they’re in a secured position, meaning their loan to value won’t be more than 75%. That’s kind of what we do. We go off of the ARV value, of course. And that’s it.

If you would like to download a PDF of this transcript, please use the button below.

[wpdm_file id=90]

Subscribe!

Subscribe to our podcast on iTunes and, if you would be so kind, leave a 5 star rating and review so that others can find this great house flipping information!

The post HF Q&A #14 – What Documents Should You Show a Private Money Lender? appeared first on House Flipping HQ.