Private financing from a friend - what is a good deal?

[Derek Jones]

I have a friend who has a lot of cash parked and wants to invest in real-estate.

He is willing to finance 100% of the deal which fits with my situation of having a lot more deals than I can personally finance. 

Quick summary:

- I have two single-family rental properties that have done very well but they were financed with conventional lending so I'm a newb at presenting a fair offer to a private investor

- Investment would be for $185,000 for a single-family home

- House will clear $500 / month in NOI

-  The house will pass a standard inspection and appraisal (I already attempted to get this property through conventional financing but it fell through because it's a condo with > 80% of the units rented. In that process I went ahead with the inspection and appraisal to see if it would make sense to pursue this option).

- My goal for the property is to buy and rent/hold long-term

- The property needs very little renovation , has been nearly completely updated with new kitchen, appliances, carpet, hardwood, paint, toilets, etc. 

Questions:

1) Assuming I'll want/need to give the lender additional security by making the loan a secured loan?

2) What is a reasonable interest rate and term? I was thinking about a combination of interest rate (let's say 5%) + 5% equity in the home where if we refinance or sell they would get 5% of the home value.

3) What is a fair amortization schedule? (i.e., If the deal is financed at $185k over 30-years then I would pay $993.12 each month. If I were to refinance or sell early then we would lookup the ammoritzation accrued -- does that seem fair?

4) Any other best practices on financing this deal with me providing 10% or less down?

Thank you BP community!