Private Money Loan, What Would You Do?

[Mary Ann Casey]

I have an RE Investor friend who has 30 years successful experience in Fix & Flips. She needs some additional rehab funding to finish a project. Details are below. She's waiting on my response or counteroffer. If I do this, it will be my first private money lending experience. *PLEASE NOTE: This is a 2nd-position funding request that can only be changed to the 1st position if I can fully pay off the outstanding first loan in addition to providing the additional rehab funding needed, which I can't do. So...What would you do, or counteroffer, on this scenario: $1,050,000 ARV Broker indicates the property at $1,150,000 to $1,250,000, but expects offers to be no lower than $1,050,000. $540K Purchase Price + $145K Fixes/Updates completed so far -------------- = $685K Invested So Far - $ 50K Portion of the loan paid off so far ------------- = $635K Current Loan Balance at 9% LLC owned, 1st deed of trust To finish the project: + $140K Additional Rehab Funding Request: - Can Invest $60k to $140k - 1 year term, 12% - No pre-payment penalty - 2nd on the loan* - Interest only payments until sold, or balloon in 12 months, whichever comes first -------------- = $775K Total Loan + $100K My own high estimate of costs for broker fees, closing costs, interest payments until sold (based on her input/estimates), plus I'm adding some Contingency, if needed. --------------- = $875k Total due at closing After loan payoffs, whatever profits remain from the sale of the house will be split 50/50 with my RE friend and her partner who are the 2 members of the LLC on the first position of the loan. Thoughts? Advise?