At what rate should I borrow money from a friend for downpayment?

[Steve S.]

THis would be on a rental.  

A colleague of mine and I are always talking about investment options, etc.  We've both been smart with our money and are looking to scale.  I brought a deal to the table in which we could partner 50/50 or, if they preferred, they could basic loan me money to reduce the amount of cash I have to come up with to close on the property.

When I asked what rate they would want to charge, they basically said "you're one of my best friends.  If it will help you, I will just give you the money and we'll write up something for you to pay me back at no cost."

This is totally unacceptable to me.   I would feel I'm taking advantage of their charity which I don't need.  I could come up with all the cash today, but am looking to minimize risk.

How would you handle this situation?  The amount would probably be about $50,000 for about 40% of a downpayment on a multi family unity that I'm acquiring for just under $500,000.