Madison, TN asked in Business Formation and Real Estate Law for Tennessee

Q: i am loaning money for a house flip. I will have a promissory note. Is that enough to protect my investment?

The house is to be short term leased from the current owner during the renovation, so the person I am loaning to won't own the property until the day before it is re-sold.

1 Lawyer Answer
Leonard Robert Grefseng
Leonard Robert Grefseng
  • Columbia, TN
  • Licensed in Tennessee

A: NO- if I were you, I would not loan money on real estate without a lien on that real estate. If the deal goes bad, you want to be able to force a sale of the property to get your money back. The current owner will need to sign the note and a deed of trust/mortgage.

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