Lending money to rehabber ?

[Stephen S.]

I am a B&H guy.  I pay cash, rehab, and then rent the houses.  

Someone that I only very vaguely know approached me about this deal:

The person is a rehab-er of other people's properties - can do the work.  Let's call him Bob.  Bob wants to partner with a wholesaler, rehabber, B&H, flipper type of RE investor.  But Bob has no money.

Bob was recently offered this deal:

The wholesaler is going to wholesale one of his houses for 70k.  The wholesaler says if Bob can come up with $5k he will hold the property and supply the funds for Bob to rehab it.  That budget is $15K.  The retail price on the rehabbed property would net about $40K which Bob and the wholesaler would split 50/50.  

BTW:  All of this is to physically take place three states away from me.

Bob asked me if I would be interested in putting up the $5K for his end of the deal.  Same to be returned with interest in 90 days.  Which raises My question:  what steps should I take / could I take to ensure that I will, in fact;  get my $5000. back?

I like Bob and would like to work with him in the future - although I never have in the past.  So this would be a multiple-first for me. <g> 

And . . . this kind of thing is not what I typically do.  How would the people who Do do this sort of thing handle it / manage it?

Any ideas?

stephen

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