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.

[Michael Boyer]

Dan, would it be possible for her to sell, pocket half a million and move east a half hour to an hour and pay cash for what is probably a larger condo or town home.....that might be my route before borrowing large sums from friends or losing the condo ...That money would go far in, say, Dublin and she could ride the Bart in I believe....as a friend, you could help her move.. Rather than fork over 75k...best of luck