Investing in 2nd position hard-money loan

[Ítalo Mendonça]

Hi BP, 

I've come into an opportunity to lend some capital to a flipper. They've secured most of the capital needed for a flip (deal is 110k purchase + 120k rehab --> 440k ARV appraisal) and are looking for a 2nd loan for cushion.

I'm aware this is quite a bit riskier then to be in 1st position, as well as the fact that the first lender (also hard-money) wouldn't be happy if he found out the flipper is looking for additional capital, even though he does have some, though limited, skin in the game.  My question to you is: what is the general course of action for me in case he defaults?

I'm aware that if he defaults on both loans, I will get my money after the first lender has been made whole, in theory. But what if he defaults on my loan while continue to pay the lender in first position? Are my hands tied in that case?

Thank you all for the help!