Lend Money to a Friend?

Question: I am using a loan from a friend to help fund our first deal but we don't have a specific property under contract as yet. How do you structure the promissory note when you need to secure the lender's interest with the real estate you intend to buy. I have seen many promissory notes that relate to real estate that naturally leave a blank line to input the property's address as the security for the loan. How would I handle this issue? I appreciate any suggestions/advice Answer: This is bad practice. You're talking about an unsecured loan between friends, a recipe for disaster. I don't know why the loan would be made prior to a property being purchased. Perhaps you want to appear to be a pure "cash buyer" when bidding. If your friend will not be on title, then I'd advise that you submit offers as a "financed buyer", but with a large EMD, a fairly short closing time frame, and with a letter of funding commitment and a bank statement from your friend. That is still a very strong offer.