Question about private money

[Brian H.]

Hey folks,

I have a nice deal under contract right now. In order to conserve capital on my end I have a couple people that are interested in helping partially finance the down payment. These are not official lenders of any sort.... just two people I know that have the money to spare and would like to make a little passive income.

Couple questions....

• How do I handle this so that I am completely above board? I am assuming we can't just have our little agreement/contract and that be it? Does this begin to wade into the waters of syndication? I know that involves SEC rules and such.  Or is it much more simple than I am thinking?
• Secondly, for those of you that do this sort of thing... I could use some help/recommendations in the structuring of these personal loans.  I know one is fine with 5 year term with balloon payment of the initial principal at the end of that.  Just interest up until then... the other would like more of a 2 year term, which I can handle... just not sure how to structure and what rates are reasonable these days for these sorts of loans from people you know?

Thank you all for any guidance!!  Hope everyone has had a great weekend.