I have someone willing to help with funding repairs for my flips (He only has a small amount of money). To make him more comfortable with the project and know he will get paid back, is the proper thing to do is file a mechanics lien? Can someone describe in detail the best way to do this or something else that is better? I am already going to present him with a Promissory Note, but wanted to know what else I can do to make him comfortable in the beginning. This will be just a simple interest loan for approximately 3-4 months.
If I were the lender, I'd want to be in first lien position, have both a promissory note & deed of trust, and have a mortgagee's title policy. That way I could foreclose if needed and would be protected against title surprises.
If you have another lender in place, you will need to check with them to see if they will allow 2nd's. Most won't take kindly to a mechanic's lien (or any other lien) being placed on the property. Assuming you own it free and clear, you can sign a note and deed of trust to secure his interest.
Site Map
Meeting Location
Manhattan Plaza6850 Manhattan Blvd, Suite 205Fort Worth, TX 76120
