Posted by Del-Ohio on October 05, 2003 at 12:05:56:
Write it up as a partnership or joint venture. If it is written up as a loan this is where you could potentially run into usury problems. Its in the wording of the contract.
We just did a similar deal with one of our rehabbers on a property that he owned but did not have the money to do the rehab.
The first thing we did when we gave him funds was added our name to the deed of the property. You could take a first martgage if it is not already encumbered but we felt safer being added to the deed with half ownership in our case.
I can email you a copy of our agreement if you like.