My First Deal, not what i expected. Is this a good idea?

[Kevin Campbell]

I've been "lurking" for a while here on BP. Learning while I save up some cash.

Anyway, a deal has presented itself and I would like to know if I should pull the trigger.

Details:

Single wide mobile home on my street. A friend of my girlfriend wants to buy it but conventional financing is not possible because of down payment requirements and it's below the $20k minimum.

Purchase price is $15k.

I would take a loan from my 401(k) for $10.5k at 3.5% and use $4.5k cash to fund the deal.

I would write a note to the buyer for $20k at 7% for 8 years.

No down payment. This has me concerned the most. But she just doesn't have it. No brainer if she could do $5k down.

Her payments to me (escrow) would equal my 401(k) loan. Approx $200.

The term on the 401(k) loan is 56 months.

I would not see any cash flow or profit until then. But she would continue to make payments for another ~3.5 years for a total profit of ~$8k.

Obviously this would be a real contract with recourse but its still loaning money to a friend.

The title would be in her name with me in first position. And she would be responsible for all maintenance, repairs and lot rent.

What do you think?