Entry into lending?

[Matt B.]

many of us here are trying to create multiple sources of income, with that said, I was wondering if private investors with let's say, 200K or more of excess capital partner with private lenders or hard money lenders on real estate financing?  

for example, as opposed to starting my own lending company and getting all the required licenses, I could just make an agreement with a lending company and say I have xxx amount of money that you're welcome to use for xxx amount of real estate financing loans, provided I get an X'% guaranteed return. 

private person ----> lender-----> lendee

I want to know if this is a common practice? If this is a common practice, what are usually some of the terms and conditions in this sort of agreement? also in the situation that the Lendee defaults, who would be liable for what?