Offering private money loans using LOC on commercial property

[Michael Andrews]

I recently purchased a 12 unit building which came with a very high appraisal value at $95k over the purchase price (which I put 20% down on). I found a local lender that is willing to do a LOC at 80% LTV on the property at the appraised value, and I am interested in finding creative ways to use that equity.

I was contemplating using that line of credit to offer private money loans to a local flipper/developer and start out in the note business. I was wondering if anyone has gone this route of using a LOC for private lending and what expertise is needed and legal ramifications there are for using borrowed money to make loans?