How do I protect myself if I lend money to an investor?

[Account Closed]

Considering a personal loan to an individual for a real estate investment. The request is a loan with an interest of 12.5% paid annually x 2 years. After two years the initial loan amount is returned. Seems straight forward. 

The question I have is regarding if the individual defaults. What should happen if he does? What are the bare minimum requirements I should request in a written agreement/legal document with this individual to best protect my asset in case his investment fails or falls short. Thanks.

[Jay Hinrichs]

have you ever borrowed money from a bank to buy a property?

if so you are now the bank.

you want a mortgage or Deed of trust

and a promissory note.

you can get a 3rd party appraisal if you wish or you can establish your equity protection on your own.

then you need a lenders title policy when you close.

pretty simple stuff really.