becoming a hard money lender

[Kenneth LaVoie]

I would like to get my feet wet with lending. There is at least one investor in my local REIC that I can start with. He has a deal right now in fact, but I find myself a little scared. I know I need a good, iron clad agreement, I assume I would want to be in "first position" mortgage wise, I assume I would want the improvements part of the loan to be disbursed "as needed", etc.

Would a credit check on the borrower be a good idea?
Does anyone have a great "template" or DD checklist?
Anything else I'm missing?

for background, I'm looking to get 10-12% plus 1-2 points on conservative deals (hard money versions of "no brainers"). i.e. borrower buys a house in need of repairs that appraises at 70, he gets it for 35, puts 25 into it and sells it for 90 6 months later, that sort of thing.

thanks all!