Accepting Loans from People You Hardly Know

[Mark Appleby]

A property manager and I were speaking about the real estate market in the area and he mentioned that a client of his was looking for an investment property and they have 300k to invest. Where I am from, that is typically not enough for an investment property. He said she is just looking for something that will get her $1,000 per month. There are probably many people like her that are looking for better returns that what they can get in fixed income and CDs these days. How would I legally go about setting up a loan with someone like this where we can set an interest rate in which they would get a better return than what is available (and likely more than the 1k per month they are looking for!) and I can use the funds to further my real estate investment?