Advice please on making my first hard money loan

[Karen F.]

We're helping our smart, hardworking young workman into his first multi.  He knows how to do all the required work.  It's a good deal - in fact, if it weren't owner-occupied required, we'd probably buy it for ourselves.  I called around to find out what current rates were, and offered him a little lower interest, plus no money down, plus lower points, and of course no fees other than the filing fee and the attorney's fees (he'll use our good, cheap real estate attorney).  I guess we have to have him get title insurance, but we won't make him do mortgage insurance.  I am sure that he will be able to refinance into a conventional mortgage in under a year.

I know zilch about making a hard money loan.  If it weren't for the fact that we've known and worked with this guy for a decade, I would not be getting into this.  Anyone out there who's done this already who can give me some advice?