Private lending from Friends

[Brian Cremer]

I currently have a house I am remodeling that is being funded by a friend for the purchase price and part of the rehab amount. This friend has a lien on the property and a lien on another property that I have a large amount of equity in. I was planning on getting a rehab loan from the bank, but the costs of this was going to be pretty hi as opposed to me just refinancing after I finish remodeling the house and getting some tenants in. Another friend has offered to lend me the rest of the money to finish out the remodeling. How should I set this up? It is going to be a simple loan of 8% interest 2 year balloon amortized for 30 years and paid quarterly. I was going to have attorney draw up papers. Was talking about letting him put a 2nd lien on the property. Is this all I need to account for legally to make sure I am not breaking any securities laws? Anything else to watch out for? Also I have other friends wanting to back me on other projects looking at similar type set up, is this a good way to proceed? Any suggests on blogs, or other posts to read on is greatly appreciated as well and any books to read. Thanks! Brian