Setting up private loan process for friends to invest

[Keith A.]

I would like to approach some friends for private loans but would like understand the process to better explain it to them. Does this approach makes sense? The terms and percentage may change but more concerned on the process.

1) Offer win-win terms. ex. 7%-9% rate, 25-30 yr amortization, 3-5 year balloon, 1st position

2) Have title company handle funds from private lender for subject property and closing.

3) Use loan servicing company like FCI to handle payments

4) At end of term either extend or refinance out

Any thoughts are appreciated.