CLEAR ANSWERS
Frequently Asked Questions
Direct answers to the questions lenders ask most.
Review a specific deal summary and documents. If it fits, escrow/title prepares closing, you fund to escrow/title, and payments begin per the note.
Many opportunities are structured around a 5-year amortization with monthly payments, but final terms depend on the deal and signed docs.
Common protections include a promissory note plus a recorded deed of trust/mortgage securing the obligation against real property (varies by state).
Typically funds are wired to escrow/title at closing rather than directly to the operator.
A recorded security instrument (deed of trust/mortgage) filed in public records that secures the obligation against the property.
Default remedies are defined in the documents and governed by state law. Operators often plan for remarketing/resale.
Payment servicing varies by structure. Confirm who collects and disburses payments and how reporting is handled.
Minimums vary. Many lenders start with a defined minimum per note; confirm current minimums during your call.
Selection criteria often include purchase discount, market demand, collateral quality, and exit/repayment structure.
These notes are generally not as liquid as publicly traded assets. Plan to hold through the expected term unless the documents allow transfer/sale.
Tax reporting varies by structure and jurisdiction. Ask your tax advisor and confirm how interest is reported for your specific deal.
Property insurance may be used where applicable. Confirm coverage types, limits, and who is named on policies when relevant.
Position (first/second) depends on the deal. Confirm lien priority and title conditions before funding.
You should receive a plain-language summary plus the actual promissory note and security documents prepared for closing.
Often yes. Many lenders reinvest cash flow into additional notes; confirm availability and timing.