What Is a Promissory Note? (With a Real Example from MHS) 📄💰
If you're considering becoming a private lender for real estate investments, there's one document you absolutely must understand: the promissory note.
At Multistate Home Solutions (MHS), we issue a customized, notarized promissory note for every investment. It outlines exactly what you're investing, what you're earning, and how you're protected.
In this blog, we'll explain what a promissory note is and show you a real sample (based on a $50,000 investment starting June 1, 2025).
🤝 What Is a Promissory Note?
A promissory note is a legally binding loan agreement between you (the lender) and the borrower (us). It includes:
The investment amount
Your interest rate and repayment terms
Payment schedule (quarterly or lump sum)
Default protections
Governing law
It’s the foundation of every private lending deal.
👤 Sample Promissory Note (Based on a $50K Investment)
PROMISSORY NOTE
$50,000.00
Date of Note: June 1, 2025
FOR VALUE RECEIVED, [Borrower] ("Borrower"), a real estate investment company in West Virginia, hereby promises to pay to the order of [Lender] ("Lender"), the principal sum of Fifty Thousand Dollars ($50,000.00), together with interest, as provided below.
1. Principal and Interest
1.1. The unpaid principal shall bear interest at 10% per annum, calculated on a 365-day year, from June 1, 2025, through May 31, 2026.
1.2. The total outstanding balance, including interest, shall be due in full by May 31, 2026 ("Maturity Date").
2. Payments
2.1. Interest-Only Payments:
December 1, 2025: $2,500 (6 months @ 10%)
May 31, 2026: $2,500 (6 months @ 10%)
2.2. Final Payment: On May 31, 2026, Borrower shall repay the $50,000 principal plus the final $2,500 interest payment.
2.3. All payments are made in U.S. Dollars to the Lender via ACH or check.
3. Prepayment
Borrower may prepay the Note, in whole or in part, at any time without penalty. Partial payments apply to accrued interest first, then principal.
4. Default
If the Borrower fails to repay by the Maturity Date, the Lender may pursue legal remedies and recover costs including attorney fees.
5. Governing Law
This Note is governed by the laws of the State of West Virginia.
✅ Why This Matters to You
A promissory note gives you clarity and protection. You know:
What you're earning
When you're getting paid
What happens if something goes wrong
It's what separates a handshake deal from a professional investment relationship.
Want to review a real note or walk through an upcoming deal? Just ask — we’ll be happy to show you exactly how it works.