Legal Question in Real Estate Law in California

You would want a grant deed if you really want to do the transaction this way, and you can include a percentage in the legal description of the property in any kind of deed. You would just tack on "an undivided 25% interest in . . ." to the legal description. However, you probably do not want to do this the way you are describing. It will require payment of a documentary transfer tax. It may also trigger an increase in the property taxes, and you will be responsible for 25% of the property taxes. The normal way to secure a loan is to get a deed of trust from the borrower, which gives you a right to foreclose on his entire interest in the property if he doesn't pay you back, but does not transfer the property to you now, which is what triggers all the tax consequences.