OfflineI'm working on my first deal. I've done my homework, and I worked up a presentation for private lenders, since my credit stinks. Two hours after sending it to a lender, he agreed to fund 65% of the money I need. My question is, if I find someone to fund the other 35% and can actually make this deal work, what do I do with the second lender? I'm sure nobody will be satisfied being in second lien position. Is this where I'd add BOTH lenders to my LLC ?
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The 2nd lender is STUCK with being in 2nd (or junior) position. He has no choice, after the 1st lender gets recorded into the deal. You're right, no one likes being in a junior lien or mortgage position, but that won't stop lenders from doing business, so don't sweat it. Just complete your funding and get it closed out to your benefit.
What I completely don't understand is WHY would you ever want to add your lenders to your LLC? Just because they're willing to lend you money, that doesn't make them your partners, it makes them your lenders. Hope this helps, best of luck to you...
Paul: "I must not fear. Fear is the mind-killer. Fear is the little-death that brings total obliteration. I will face my fear. I will permit it to pass over me and through me. And when my fear is gone I will turn and face fear's path, and only I will remain."
Duke Leto: "I'll miss the sea, but a person needs new experiences. They jar something deep inside, allowing him to grow. Without change something sleeps inside us, and seldom awakens. The sleeper must awaken." - "Dune."