loan advise for construction cash

Started by FrankInWI, January 24, 2007, 08:22:55 PM

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FrankInWI

odd question for this forum, but I suspect there may be some good advise to be had here.  I need some cash for phase one of construction and have only a fair credit score.   For the first time I am thinking of asking my brother for a loan.... and I have collateral.  The land/lot I own is paid for.  Worth about $35K.  
My question is, how do I sign this off to him temporarily as colateral?  Can I make out paper work like "quick claim deeds" (not sure what that is) or simpler methods give him rights to the property should I fail on my re-payment (which of course won't happen).  
This is an embarassing question to ask....but I'm stuck right now in time where I need a temporary hand.  Bro will want to help, but I want to be able to give him colateral.  
Advise?

southernsis

Quit Claim deed is not what you want. Go to an attorney with your brother and tell the attorney what your proposal is. The attorney will be able to draw up the paperwork stating that your brother is loaning you money with your land as collaterial. If you fail to make payments then your brother can take the property. Talk to an attorney, as things are different in different states. An attorney can advise you and make sure that the proper paper work is done.


Amanda_931

Southern Sis sounds right to me.

Quit claim deeds are--or used to be--pretty common in rural areas.

The problem in buying property that way is that it is, for instance, perfectly legal for me to design a gorgeous looking deed to the Brooklyn Bridge in which I sold all the interest I had in the place.  I've even considered doing this a few times when I've been really broke--selling them for poster or print prices.

Selling it that way, well OK, but you haven't shown how you would protect yourself if, heaven forbid, your brother went bankrupt and creditors seized that deed, written up without qualifications.  Or even with.