These two issues are put together as they appear the most in the same transactions in private lending.  The staged or multiple funding scenarios are most prevalent in new construction and rehab loans – properties that are not ready to market or cash flow.  The Deed of Trust is created by multiple fundings at scheduled times for the borrower.  The borrower doesn’t want to pay interest on the entire loan if they can only use portions at a time to construction schedules.  So, the broker will set up a funding schedule with the borrower based on his needs and use of funds.  The Broker will then have several fundings or opportunities for the investors to get involved.  This scenario is risky as investors are putting their money into property that is not complete, therefore not marketable or sellable which significantly reduces exposure. And if one of...