Diagram For Borrower-Dependent Notes

Borrower-dependent notes secured by real estate are the backbone of today’s Crowdfunding industry. Here’s a diagram showing one possible structure. There are others, but I like this best in most situations.

Caveat #1:  A diagram can’t address these critical issues:

  • Broker-dealer registration
  • The terms of the Notes and the Indenture
  • The terms of the Trust
  • The assignment of collateral
  • State lending laws

Caveat #2:  This structure doesn’t work for Title III or Title IV. More on that later.

Questions? Let me know.

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