Private money contracts: here are 14 contracts, paperwork and legal forms for real estate investors.

by | Indy Anna, Real Estate Investing, Uncategorized

Private money contracts: here are 14 contracts, paperwork and legal forms for real estate investors.

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This is a quick video I made about  a Hero’s experiment…

Private money contracts: here are 14 contracts, paperwork and legal forms for real estate investors.

Indy Anna Explains
– Some examples of the paperwork that you need to private money lending and real estate closings in general.
– The number ONE thing that causes legal problems for real estate investors and how to avoid it from happening to you.
– 14 different contracts, paperwork and legal forms that you can use download for FREE that will help you close your private money deals.

So I’ve made a few classes about private money:
– We made a class on what private money is and the difference between private money and hard money.
– I also went over the five basic things that all real estate investors should know about private money.
– You should also check our my other class on the 10 ways to find private money lenders because if you do that you’ll always have endless source of money.
– Plus I explained how you never need money to make money in real estate or any other business, so these private money classes are so that you know how to help others get money.
– Also the number ONE thing that gets real estate investors into legal trouble is what you SAY, it is no the paperwork or what the other parties it is what you made them THINK that they signed that is often more important.  To solve this issues you always want to be open and up front with everything and especially these documents.

So here are the 14 documents, this would cost you over $123,000 in legal fees if you went to lawyer and had them drafted and that is IF you know what to ask for.  This a BIG freebie and you can watch other classes above and download the free contracts in the links in the description below.  Let’s get started on the 14 ways…

Here are 14 Private Money Legal Forms:
Private Money Contracts and Paperwork.

1.)  This is a Private Loan Agreement.
This loan can be for anything as it doesn’t have to for real estate but you can use it for that as the reason for the loan.  This template can be used repeatedly for various kinds of financing and purchases of real estate and just about anything else.

2.)  This is a basic Payment Agreement.
This outlines payment and balance details.  This is the details of the loan and when the payments should be made and how, like a check, ACH, etc.

3.)  This is a basic IOU with a Public Notary.
With a “Public Notary” seal this way when it gets notarized it is more official and proof that the parties actually did sign and agree to the terms.  This also helps in recording this on a title as a “lien”.  Having a recorded IOU that is notarized can be used in court but usually more powerful is the ease that it gives a private lender.

4.)  This is a Family Loan Agreement.
If your private lender is family or somebody close you can use this document.  Even if the loan wasn’t that “formal” it can help to use this because it can protect equity in case of death or unexpected lawsuits.

5.)  This is a Private Loan Extension Agreement.
This is for changing an item in the loan like the term or payments.  It is good to have this on file for ANY changes to that you know they are documented and recorded.  This avoids confusion and lets everybody know that even the smallest changes to your agreement/s will require documentation.

6.)  This is a Loan Guarantee Agreement.
This provides security for a loan you are getting or one that you are getting for somebody else.

7.)  Here is a Personal Loan Agreement.
This is often used when one individual borrows from another individual.  Sometimes in private money agreements the lender (person with the money) feels better if you are “on the hook” more so than using a random LLC or other business entity.  You would feel better with this too when you are on the lending side.

8.)  Here is a Promissory Note.
This is a basic template that can be used for more than just private money.  This is one person as the borrower agreeing to pay back the lender or person who is provided the money.

9.)  Also you’ll want a Release of Debt.
This shows that the debt has been paid-in-full and that all the terms of the private loan have been to the satisfaction of the lender.  You also want to make sure that for every document that creates a “lien” or something like that you also get the completion and finishing document to record.  The “Release” is important to document and record.

10.)  You also want to make sure you have a Release of Personal Guarantee.
This removes all burden from the borrower and the private lender agrees that all of the terms of the contract have been met and the personal guaranteed is settled and they are “off the hook”.

Those are some main ones but here are a few extra ones that have been helpful:

11.)  You can use a “Mechanics Lien” to cloud title.
If you are ever owed money or consideration.  To new private money lenders I sometimes use this as an explanation of how a “first versus a second” mortgage works.

12.)  30 Day Preliminary Notice.
To file a lien sometimes you need to send and record a notice or a “Notice for the right to file a lien” so you can use a 30 Day Preliminary Lien Notice.

13.)  Lien RELEASE Form.
You also want to make sure that you file and always GET filed (if you are on the other end) the full RELEASE of the Mechanic’s Lien document and record.

14.)  Mortgage Verification Form.
You can use a Mortgage Verification Form for a few purposes that I explain in the other video. One big reason is that it lets your private money lender know the kinds of information that a “normal” loan has and we record ours based on that.  This won’t be an issue with experienced lenders but many of mine are new.  I also use this as a way to help when I’m being a sandwich lender so my borrower and my source both understand all the terms.

Okay so that’s it you can download all these forms here at BigReia.com.

Here are 14 Private Money Legal Forms:
Private Money Contracts and Paperwork.

1.)  Here is a Loan Guarantee Agreement that provides security for a loan you are getting or one that you are getting for somebody else.

2.)  Here is a basic Payment Agreement that outlines payment and balance details. 

3.)  Here is a basic IOU with a “Public Notary” seal so that when it gets notarized it is more official and proof that the parties actually did sign and agree to the terms.  Having a recorded IOU can be used in court but usually more powerful is the ease that it gives a private lender.

4.)  Here is a Family Loan Agreement, if your private lender is family or somebody close you can use this document.  Even if the loan wasn’t that “formal” it can help to use this because it can protect equity in case of death or unexpected lawsuits.

5.)  Here is a Private Loan Extension Agreement, this is for changing an item in the loan like the term or payments.  It is good to have this on file for ANY changes to that you know they are documented and recorded.  

6.)  Here is a Private Loan Agreement, this loan can be for anything as it doesn’t have to for real estate but you can use that as the reason.  This template can be used repeatedly for various kinds of financing and purchases.

7.)  Here is a Personal Loan Agreement, this is often used when one individual borrows from another individual.  Sometimes in private money agreements the lender (person with the money) feels better if you are “on the hook” more so than using a random LLC or other business entity.

8.)  Here is a Promissory Note, this is a basic template that can be used for more than just private money.  This is one person as the borrower agreeing to pay back the lender or person who is provided the money.

9.)  Also you’ll want a Release of Debt, this shows that the debt has been paid-in-full and that all the terms of the private loan have been to the satisfaction of the lender.

10.)  You also want to make sure you have a Release of Personal Guarantee, this removes all burden from the borrower and the private lender agrees that all of the terms of the contract have been met and the personal guaranteed is settled and they are “off the hook”.

Those are some main ones but here are a few extra ones that have been helpful:

11.)  You can use a “Mechanics Lien” to cloud title if you are ever owed money or consideration.  To new private money lenders I sometimes use this as an explanation of how a “first versus a second” mortgage works.

12.)  To file a lien sometimes you need to send and record a notice or a “Notice for the right to file a lien” so you can use a 30 Day Preliminary Lien Notice.

13.)  You also want to make sure that you file and always GET filed (if you are on the other end) the full RELEASE of the Mechanic’s Lien document and record.

14.)  You can use a Mortgage Verification Form for a few purposes that I explain in the video.  One big reason is that it lets your private money lender know the kinds of information that a “normal” loan has and we record ours based on that.  This won’t be an issue with experienced lenders but many of mine are new.

So we just went over:
– The big cause of legal problems for real estate investors and how to avoid issues by using the same paperwork and crystal clear explanations.
– We went over each of the 14 documents and explained each one so that you know exactly how/why it works.
– PLUS you are even getting all the paperwork to download for free below…

So  private money for real estate investors can be super easy and fun.

Thanks so much!  = )

Make the Universe Smile.

Want more (brilliantly) EPIC posts of real estate investing and bidness badasssery...?

There is a great post and class on the 38 Ways to Buy Apartment Buildings Zero Down with Pet Policies, and here are some other helpful and EPIC posts... for starters as a real estate investor if you ever want to build a business that makes you 30 grand a month then you MUST do this...

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Thanks so much!  = )

Make the Universe Smile.

~ Indy Anna
Love (at) BigReia.com
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