Interest and Equity Question

[Anthony Marc Evans]

Someone has come to me with a non-typical offer. This is a trusted friend who has asked for this, and he has done this once prior with success. He is asking to borrow money from me and another to purchase a home which is in need of remodeling. Asking price is $350k + he is going to put in the anticipated $125k for remodeling. In return he will pay the two investors 2-1/2% interest on the money for 5 years. Then me and the other investor split 40% of the equity gain at sale. I've read about straight forward equity investments when a house is flipped, and hard money where there is a straight interest return but no equity. This is the first I've been exposed to a deal with small interest and equity down the road. Is this a common thing that goes on in this market?