There will also be a question with the insurance. Your insurance man would probably not like the boat you are insured for being run full time by someone else. Not to mention stored at a place other than what they figured on. You never want to give an insurance company an obvious reason to deny a potential claim. Just my 2 cents but have your buddy get his own loan and make a clean deal. No written agreement between buddies will trump your lender and insurance company having an issue with it.
+1 In this lawsuit happy environment we live in, you don't want the liability. Title in your name = you are liable for ANYTHING that happens with the boat. Your Buddy hurts someone using the boat, they come after you. A guest of your Buddy gets injured on the boat..... they come after you. Trailering and something happens that causes an accident (tire blow out, boat falls off trailer, trailer comes loose from tow vehicle, etc, etc, etc. ) they come after the legal owner..... which is you.
Even if he were to get insurance on the boat in his name, as soon as a lawyer finds out your name is on the title, they will come after you as well. That's why I always go to the TPWD and have the title transferred the day of the sale. And I also fill out one of those forms saying I sold the boat and file with them. And last but not least (selling cars as well) I write out a bill of sale FOR ME, that says the buyer (fill out name, address, DL#) purchases said vehicle (make, model, yr, VIN, SN#, etc) on date (and time) from me (fill out name, address, etc) and is legally responsible for it from here forward. include the price, Then make them sign it. I have the originals of these in my files. That way I am covered if they decide not to transfer title and the law comes after me if the vehicle was used in a crime, involved in an accident, etc.
It has come in handy twice. I had one car I sold wind up years later abandoned in dallas. City of Dallas came after me for storage fees and towing. I provided a copy of the sale to them and they backed off. The person that bought it never changed the title, and drove it for 3 yrs without ever registering it. Then abandoned it.
The second time was when a buyer came back 18months later and wanted me to sign a document stating that I had just sold him the truck so he didn't get hit with penalties and a ticket for expired license. I told him no way, and I have the document with his signature on it from when he bought it.