Buy a Pre-Foreclosure from a friend, or give a Personal Loan??

[Bret McKee]

I have a friend who's home is currently in pre-forclosure status (caused by a lengthy identity theft situation).  I would like to help him get out from under the mess by relieving some financial stress, and allow him to keep his home.   At the same time, I would also like this to be an investment.    

One idea is that I buy into a percentage of the property based on the amount he needs to get ahead of the curve,  with an option to sell at a given time (say 3 years).  Another option was maybe just a straight loan at 10-12 percent, having the house as collateral.  Or, should I just buy the house from him and keep him as a renter?

Any thoughts, or advice on  a win-win strategy?