Shifting to private money...

[Alex M.]

I recently put a small 2/1 row home in an up-and-coming neighborhood under contract. After running into a couple of hurdles in getting the financing underway, I was forced to ask the seller to extend the closing for 2 weeks. They said no. 

Without a means to make this loan close any faster, I've been looking around at what my options are. A few people have recommended hard money and provided contacts in the area. This will be my first investment purchase, so I do not have direct experience with hard money and have been reluctant to want to go that route. Instead, this morning I went back to the seller and asked directly if there was anything at all that I could do to get two weeks extra - they agreed to do it under the following considerations:

1. I don't ask for seller assist - I was getting $2k

2. I pay $1k over what I had it under contract for

So then lunch happened. I was at a business meeting, for totally unrelated reasons with a colleague. Towards the end of the conversation the topic came up briefly, and my colleague turns to me and says "how about I lend you the money at (insert competitive rate) for the full purchase price, but you need to do the homework to figure out the title, recording requirements, etc, and I can have this ready by (insert closing date)". What!?!?!

Of course I was excited! ...but now I do need to do a whole bunch of homework, and really quickly. Closing is in less than 2 weeks, and have no idea at all what it means to buy a property with private money like this. This colleague is not a real estate investor, and is just looking for somewhere to get a decent return vs sitting money in a bank. 

Does anyone have experience in a situation like this, and are there good resources that I could review to ensure that I am dotting all i's and crossing all t's? 

Thanks in advance!