Financing a home build with another investor

[Ian Springer]

Hello,

A good friend of mine bought a property at a tax sale, its an old abandoned house, he plans to demo it and build a new home to sell.

He needs financing of which I am able to cover 80% of. So we decided to bring another investor in for the last 20%. My question is considering I get the first lien, what can the second investor do to make sure he has some collateral, so he feels like his investment is protected.

My plan was to have the 20% investor lend to me using a promissory note then I would take 100% of the money and loan it all in one taking first lien position.

Does this sound like a good plan?

Thanks for any help.

Ian