How to pay back friends and family money

[Catherine Cleveland]

Our structure is I buy, partner rehabs, we split profits. We are typically in 60/40 up front (me 60) and split profits 50/50 on the selling of property. I have a few friends that want to give me (my LLC) their money to use. My idea is to use friend/family money along with my own to buy, and have partner rehab so we can buy a bit bigger or have more deals going at once. How do I write this up for my friend/family money? I can do interest only loan for duration or payout with interest on back end of deal, either way, my question is I guess it can be promissory note? Third party loan service? What about taxes? Do I issue them a 1099? I don't want to get caught up in some legal issue. What have you all done with friends/family money? Or even others who want to do "business" with you as hard money lenders?