Lending 50k
Looking for some guidance as I've never lended cash before:
Loaning 50k for 4 months, balloon at end, borrower has a duplex as collateral. FMV 300k, 150k mortgage on property. So there is room for 2nd, however is it better to make it look like the 50k is buying an interest (partner) on the property ? borrower is willing to do it and is also willing to put a clause in to address if note is not paid I can buy out her interest in the property. She's that confident that the money will be payed back on time.
I guess what I'm asking is which is the best way to secure my 50k ? and if not paid back which way will let me recove my 50k the quickest with the least headache. Or does anybody have any other suggestions to throw around other than don't do it 
Thanks in advance
A couple of ways of doing this:
First, by a normal 2d lien deed of trust to secure your loan. Hazard here is if the owner defaulted on her 1st, you'd have to pick up her missing payments on the 1st to protect yourself and your mtg.
Second, she could give you a deed now, then "masterlease" the duplex from you, and you could give her an option to buy it back from you and whatever you agreed on...so the buyback price would get you your profit/interest for you loan.
I would hesitate to do the sale with L/O if the duplex is her home, as then she might claim the sale was really a loan, at an illegally high interest rated, etc...a BIG NONO in lots of states.
But if she does not live there, and will give you an affidavit that it is NOT her residence, and that the loan is for business, investment purposes only, it might be OK.
I'd talk to your lawyer and have him/her write it up so you are protected whichever way you go.