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Ask Barrister Your Own Question
Barrister
Barrister, Attorney
Category: Business Law
Satisfied Customers: 33714
Experience:  15 years practicing attorney, JD, BA, MBA
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I am looking to loan a friend some money. Roughly 200-500k.

Customer Question

I am looking to loan a friend some money. Roughly 200-500k. I would like to use his home or other personal belongings as collateral for this money incase anything happens. My question is, say something happens and he isn't able to pay me back. Do I have the right to sell his home to collect my money back? What sort of contract or agreement needs to be put in place for me to exercise that option? Thanks
Submitted: 8 months ago.
Category: Business Law
Expert:  Barrister replied 8 months ago.

Hello and welcome! My name is ***** ***** I am a licensed attorney who will try my very best to help with your situation or get you to someone who can. There may be a slight delay in my responses as I research statutes or ordinances and type out an answer or reply, but rest assured, I am working on your question.

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In a situation like this, you would want to have a Promissory Note drawn up and signed by the borrower as well as a Deed of Trust (i.e. mortgage) against his property that gives you the right to foreclose and sell the home in the event of a default.

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I would highly suggest that you require the borrower to pay for a title search on the property for you prior to making a loan because you don't want to loan money on a property that is worth $500K that has $498K owed against it already...

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thanks

Barrister

Customer: replied 8 months ago.
Hi Barrister,Thanks for your reply. Do you have a general promissory note template where I can use in my situation?John
Expert:  Barrister replied 8 months ago.

I can't provide legal documents to customers as that could be interpreted as legal representation. But I can direct you to a site I use myself for professionally drafted forms that you can purchase for a fraction of what an attorney would charge. The site is USLegalforms.com and they provide state specific forms. Just search for Promissory Note and then Deed of Trust and it will bring up both of them for you.

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thanks

Barrister

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