Potential terms for private money

[Chris Calabrese]

So I'm looking to do my first flip, but haven't narrowed down to a specific property yet. I have a couple of friends and family willing to loan some money assuming I can find a good deal, and I have about 20k to put in on my own. I was considering offering 2 options:

1) Straight loan earning 10-12%, interest payable on property sale

2) Loan earning 5-6% plus they get 10-20% of net profit on the flip

I'm looking at properties that I can get done for <$150k and sell for <200k. Anyone think this makes sense?

Also, does anyone have a private loan "template" that would be valid in South Carolina, or should I just consult a local attorney?

-Chris