does this sound reasonable?

Over the last year i've been getting more into photography as a hobby and would like to try to make some money on the side (so far haven't sold anything on alamy yet :/ )

I live in an area near two universities and while talking with a friend about it he mentioned that likely there are lots of aspiring models in the area who would be interested in low cost head-shots/portraits for their portfolio.

I don't really have a studio but i think living room can accommodate a backdrop with enough room to back up and get upper body with a 50mm lens on a crop sensor possibly even full body shots if i move some stuff.

I think i can offer some pretty good shots and i could use the experience as well as the extra money, the questions are is this a good idea? since I don't have a separate studio is it practical to use my house for this? how much should I charge? should i only offer a Disk with the pictures or do prints? should i make all clients sign a release? if so what should i cover in that release?

obviously my setup is a bit ghetto and i'm no pro so i would be upfront about that and would want pricing to reflect that as well. any advice on this plan would be appreciated.

What line of business is your friend in? If he has some sort of connections to modeling agency and can get a flow of clients to you then absolutely a good idea.
The key is the connection to some other agency that is going to get you clients. In your post you did not really clarify where you were going to get clients. I know there are universities near by but that in itself is not going to bring clients to you.

he probably knows some people around but hes not in the biz, my plan was to advertise my services via local fliers, bulletin boards, word of mouth (i work for one the universities and am active in one of the clubs) and craigslist.

i have a lot of connections with students i could probably find a target group that's into modeling.

I would try a different approach. It is a tough industry. What about talking to the pros in your area and try to get assisting jobs?
It is not an easy market.