Is it safe to fund a flip out of state

[Ying Weng]

Hi, I am considering a project in another state.  I am asked to lend 80% of the total fund.  The return will be 10% in 2-4 months.   

It sounds tempting, but here are my concerns:

1.  How do i know whether they use all the fund to improve the house?  The worst case scenario is they buy the house with half the fund, and just walk away with the rest of the money.  I will be left with the house which is only worth half the money.  Can i control the risk by asking for itemized receipts before releasing the money from the escrow account?     

2. I proposed if they can't sell the house in 12 months, i will take over the ownership.   But is it legally allowed?  

Thank you