So overall it seems on the reasonable side of fair if you didn't have to do anything at all or spend any time arranging anything.

Wouldn't you guys stay a thousand miles away from this kind of arrangement in order to protect yourselves from litigation or being a labeled a bad actor by the SEC?

A good note broker will collect all the necessary documents and help out with all of the paperwork, arranging appraisals and setting up closings with tile companies, etc.

Our favorite guest, Renae from Mesa, AZ, always prepares notebooks with local interests, arranges discounts at restaurants and leaves personal notes for things that are going on in the area.

Just make it a part of the "roomate agreement" that either party can end the arrangement with very little notice if there are concerns.

Both of these roommates are looking at you to provide them with an enjoyable living arrangement. 

If it is viewed as a partnership arrangement it would seem to avoid the lending regulations and SEC restrictions Bill Gulley speaks of.

Are other financing arrangements common such as percent on the loan plus a cut of the profits?

From there I arrange to meet the owners and look over the property (if I can).

We could still structure it as a private lender arrangement.