1099 for Friends and Family on Private Loans?

[Ryan Denman]

Has anyone out there done an extensive amount of raising private funds as small loans ($1,000 to 35,000) from friends and family members with interest paid on the loans?

For a private loan that I use to invest in real estate and then pay back with interest (lender gets only interest, no equity in deal), do I need to send the lender a 1099 showing how much interest they received?

Are there any other legal implications to using privately borrowed money to invest in real estate that I should be aware of?

I live in Colorado (Erie) and will likely be investing out of state (OK, MO, OH, AL, OR)

I believe consulting with a CPA or lawyer would be wise on this, but looking for some general opinions on how much paper work needs to get done so the IRS does not come knocking at my door. 

Thanks!