Sample Promissory Note Agreement

[Ken Ebbitt]

Hey there.  A friend is buying a home to rehab and flip and he is looking for financing.  He is offering 10% annual return and expects to flip the house in 9 months.  His brother is a contractor and they have flipped houses together before, and we live in the Bay Area where the market is strong, but I'm a newbie at this type of lending.  So my questions are:

1) Does anyone have a sample Promissory Note agreement they could share?  Repayment terms, etc.

2) How would payment typically be calculated for a loan like this, and what is the customary repayment structure?  Monthly, end of term....

3) I'm only getting paid on the loan and not the upside from the resale.  Is that customary or should I want to participate in resale?

4) Is 10% a reasonable return for this type of loan?

5) Any things to watch for that a newbie might miss.

Thanks for any help.