Looking for advice on structuring a private money loan

[Kat Malkowski]

I'm looking to reach out to some of my current clients to see if they are interested in funding some of my future investments and I have several questions. Let me preface this by noting that any of the individuals I would approach would be people I know quite well as I've established business relationships with them over many years at my current place of employment (since they know where I work, they can be assured I'm not going to run away with their money).

While I'm sure there's no "one size fits all" for private money lending, I am simply looking for some kind of direction or examples of how other people have structured it.

First of all, I am interested in a debt partner versus an equity partner, and for now, will be looking to flip properties. Am I able to structure a loan where I just borrow the funds for the repairs (since I should be able to get a conventional loan for the property itself)? And if that's possible, how is the loan secured - because I wouldn't want it backed by the note if I'm the one paying for the mortgage and they're only funding the repairs. What type of terms are usually acceptable to a PML (as far as length of time to pay back and interest charged)? Do you normally make monthly payments to them or are they paid entirely at the end of agreed length of time? And most importantly, what type of document is needed to make the loan "official"? When dealing with friends and family, can it be as simple saying, "Here's $50k - pay me back plus X-amount in interest in 6 months" and shaking on it, or does an attorney need to draft something in writing?

Again, if anyone would like to share specific examples from their own experiences (bonus if you want to lay out the actual math of your deals), I really appreciate it!