Standard Legal Disclaimer: The OZ Legislation and Regulations are ~250 pages long to date, and additional guidance is still forthcoming. 

You will want to become familiar with the State and Federal regulations related to selling homes. 

They want you to use a cashier's check or wire transfer to them and they will in turn do the same thing for the seller....give them cashier's check or wire transfer when it closes.Make sure you are closing at a title company.Based on your questions....I would encourage you to have a realtor or attorney on your team and advising you on contract, closing procedures, and structure of the deal. 

Regulators listing and I used a real estate agent.

You may want to ask an attorney to be sure in your area, I'm not a lawyer or familiar with the regulations in your area.The terms in most places that I can think of can be whatever you and the tenant agree to.

they fool you because people are aware of PMIPrivate mortgage insurance on federally regulated loans.. however for Hard money loans there is no such thing its simply a guy pretending to be a lender and stealing money.. nothing more nothing less he will steal as much as your friend will send him then go dark. 

If the deal is ever scrutinized by a securities regulator (or one of the investors' attorneys), it will likely be deemed to have been the sale of securities without following an exemption (which requires proper disclosures and SEC/state securities notice filings).In my experience any more than 5 people in a member managed LLC is a recipe for disaster as they can't agree on how things will be done (too many cooks spoil the supper...), so it creates dissension, stress, and in the worst cases, litigation.  

I was thinking about getting a stackable washer dryer (much cheaper option) but not sure how I might regulate it's use or how to charge.

 @Abel Marin Simply put "Hard Money" is a loan against an asset without going through the standard underwriting procedures that conventional loans offer.

There are also operational differences -- the notion that one lender can be all things to all consumers and loan officers, in the current over-regulated & competitive "margin compression" environment, doesn't really play out.