How to start a lending business

[Greg Moran]

Howdy BP people, 

I'm looking for anyone who has "been there, done that" with private money lending, and has put the business framework around that activity. I already have a personal self-directed IRA set up; I have a real estate deal pipeline lined up with a rehabber; but now I'm wondering if I need to make my lending activity more formalized by establishing a business entity.

What have other people done? At this point, I'm also looking for only the most passive investing strategies, because my full-time Active duty military assignment takes significantly more than a 40-hr work week. Eventually (in 2+years) I will be looking to scale up. 

Thanks for any of your suggestions!