It depends... who owns the LLC and how are profits going to be distributed. If your just collecting intrest on the money i would just set up a mortgage. If you are sharing in a split of the profits and its a one time deal i would look at forming a joint venture. If this is going to become a business and you own the LLC togather I wouldnt worry about it and work with the title company or closing attorney to quit clame it into the LLC at the time he closes on the purchase. If you question your partners motives and ethics at the beginning you may want to avoid being partners in an LLC. And joint venture the projects as the come along.
Might be a little different up there, but Justin is spot on. Depends on how well you know your friend. I do a lot of stuff with my guys on handshakes believe it or not.
Anyway, like Justin said, if its just the one deal, pen it out on paper, let him buy it and secure it with a mortgage. You can transfer the property later into an LLC or form a JV/partnership and run it while its in his name. You arent on title as an owner, but he cant sell it without paying you off because of the mortgage you have.