Tag Archive for: funding deeds of trust

private notes done right

In our last post (Ways to make your private notes a lot more secure. Part 1) we discussed 5 ways to keep your private notes more secure.  In this post we are going to wrap up our conversation on this topic with the remainder of our top 10.

Private notes are a great way to earn above market interest rates and this is a few ways to keep them more secure and well protected.

6.  Check how committed your borrower is to their promises by asking them to put things in writing. That’s what a loan agreement is for—to spell out every term of the loan.  You will find a lot gets promised and don’t try to commit it to memory.

7.  Walk away if a borrower offers outrageous rates. If it’s over market rates, it’s probably a scam. Good borrowers don’t want to pay inflated rates. In fact, they want to pay and negotiate the lowest rate they can get.

8.  Always escrow funds for fix ups. That means you hold the renovation funds back at closing and release them later, as work is completed on the property. This will ensure the property value is reached by all the worked being completed as agreed.

9.  Ask for a borrower’s “story.” Learn about the good, the bad, and the ugly. This will build trust and prove if a borrower is trustworthy. If their story changes each time you talk to them, walk away. Don’t be talked into a bad loan relationship. Get all of your agreements in writing and fact check as much as you can.

10.  When someone needs to close a deal SUPER-fast (in hours or a day or two), run, don’t walk. This “emergency” to fund NOW will likely become a pattern and those loans will become a headache for you for years to come.  The borrowers will also likely want to skip steps that protect your money…there are too many loans out there to take on this extra risk.


If you have any questions on how to keep your loans as secure as possible please reach out to us on the Contact Us form.

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Private notes done right

What’s one of the best things about investing in loans?

It doesn’t matter if the market is up or down. Your money will be always be protected (if you do them right), and you’ll always find checks arriving in your mailbox.

But before you invest in loans, you need to make sure they’re good ones.

Last post, I shared the first foundation block to a good loan: good properties.

Today, I want to reveal the second key foundation: good borrowers.

In hot and cold markets, you want someone you can depend on to 1) keep you protected and 2) confident your payments will arrive on time.

So, what makes up a good borrower? Here are my top 3 requirements:

  1. Proof and history. They have a solid history and proven concepts for their business (be that rentals or other investment like fix and flips).
  2. Reliable income and reserves. They do not solely rely on the property to make their payments.
  3. Honest communication. They do not hide any material facts, they’re happy to keep you updated, and they’re never late with payments.

Basically, you need to find a borrower who you enjoy working with and creates a win-win relationship. A loan with this person should not create extra work for you.

It’s really as simple as that.

So, now that you have a good property and a good borrower to work with, how can you make sure your loan is secure? That’s up in our next post.

Private lending

Ready to build your foundation for good loans? Contact us today and see how we can help you succeed in private lending.

  • Email us a question at Mike@TheNoteShop.com
  • Schedule a 30-minute consultation.
  • Enroll in my personalized coaching services.

Did you enjoy Private notes-Income and Security #2?  Check out:

Private notes-Income and Security #1

Private notes-Income and Security #3


Private notes-Income and Security #2


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