Can I borrow from friends and then lend at higher rates?

[Clarissa McPeck]

I've been lending to rehabbers at 12-15% and now have friends asking to place some of their money at 7-9%. I'm thinking I can borrow from them to lend out and make the spread. My question is, how do I give my friend security for their investment? Typically I get a deed with my note with the rehabber, but if I'm just in the middle, do I then give the deed to my friend? Do I need a license to do this? Any advice is greatly appreciated.