Private Lending Structure Question

[David O.]

I have a question regarding how Private Lending is typically structured. I will give you this scenario. 

I have a SFR home that I will purchase for $65,000 and rehab for 25,000 the ARV will be 100k. I would like to borrow 100% from my friend "Bill". Bill has a self directed IRA that he would like to loan me the money from.

1.Is there a typical "best practice" structure for this loan? I.E. do I give bill a first position on the property or just sign a promissory note? 

2. Anyone experienced on how Bill would access those funds from his self directed IRA. Does he contact the custodian and with what documentation?

3. Any tips on preparing the appropriate documents. I imagine having an attorney do it properly makes sense but any tips surrounding this? 

Thanks so much.