Lending capital to a friend, contractual obligations

[Joshua Greenberg]

A friend of mine would like to borrow 90k to do a full reno on a project he has just purchased using another 90k he was able to acquire through a conventional mortgage. We have been friends for many years and I am concerned that my personal bias may interfere with the negotiation process. What are some standard protections that I should concern myself with including in the contract? Are there any tips that may help in facilitating the deal between two friends?

[Jonathan Twombly]

Originally posted by @Joshua Greenberg:

A friend of mine would like to borrow 90k to do a full reno on a project he has just purchased using another 90k he was able to acquire through a conventional mortgage. We have been friends for many years and I am concerned that my personal bias may interfere with the negotiation process. What are some standard protections that I should concern myself with including in the contract? Are there any tips that may help in facilitating the deal between two friends?

 Joshua, you're going to need a loan agreement with your friend, which you will need a lawyer to draft.  I suggest finding a lawyer who is very experienced with private loans like this.  He or she will know the standard legal and business terms for such a loan, and that will take it out of the realm of friend-to-friend negotiations.  Unfortunately, I don't know anyone to recommend, but I am sure someone else in the community does.