Advice on a secured Loan

[Dan Maschmeier]

Hi,  I have an opportunity to help out a friend and I want to know if I am risking too much. 

My friend owns a condo in San Francisco, worth around $900k. She says the total due on a primary and HELOC on it are about $400k. There is some back HOA dues outstanding. She stopped paying the mortgage last month, but has not gotten a notice of default. She is in need of money and needs to stay there and is asking me for a loan of $75k which I would secure against the condo. She is unemployed and will stay that way for at least 12 months due to a medical issue. I am planning to write the loan with no monthly payment required, as she has no income, and make it fully due in 18 months.

I have a few questions to start.

1) Can I use a deed of trust to secure my loan even with a bank loan as primary mortgage and a HELOC already in place?

2) What is fair interest to charge?  As a businessperson, not a friend.  We both agree the deal has to make business sense to both of us.  I was planning to use the money on a flip, when this came along.

3) Are there any other red flags or pitfalls I should be aware of?

Thanks in advance for your advice.