Private money lending to "secondary circle"

[Tim Johnson]

Morning all,

I am thinking about lending on a private money opportunity in the Tulsa, OK area. The investor has already purchased the home, done a few months of work on it, and needs money to finish rehabbing - asking $12k but I think they may need up to $20k based on my observations of the property. The term would be 3-4 months and they are hoping to get money within a couple of weeks.

The investor is in my "secondary circle" - I am friends with one of their friends. I am comfortable with the person's character and background and consider them trustworthy. 

Who else has experience with private money lending like this? What kind of due-diligence did you put into the deal ahead of time? What kind of protections did you put into the deal? How long did it take to arrange -- what would you do if you only had a couple of weeks of prep time?

Thanks!