I am considering an investment opportunity in which I would act as the Gap Fund lender and am looking for advice as this is a new territory for me. The borrower is looking to purchase a residential property (flip) using HML as the primary source of funding for the Purchase ($200K) as well as for the Rehab costs ($180k) with a conservative ARV of $525k. HML is funding 85% of Purchase price plus rehab costs. HML is charging 11% plus 3 points. My role would be to provide about $35k to cover all fees due at closing, plus an additional -/+$20,000 that would ultimately be used for 6 months of holding costs to be paid by borrower to HML. The borrower (friend) does real estate flipping as a full-time job and is their sole source of income. They have been flipping several properties each year for about 5+ years. They seem to be a pretty experienced flipper. They are offering a 50/50 split of the profit.

My questions:

Is a 50/50 split of profit a typical profit split in this type of lending scenario?

What protections should I request to be included in the lending contract between myself (investor) and borrower (property purchaser) to better protect my investment?  I understand that 2nd position does not provide much protection and am looking to know if there is something better I should request to be included in our contract.

Would it make sense for me to request the use of an escrow account to hold the $-/+ 20k that the borrower would ultimately be using to pay HML holding costs?

Any other protections I should request to be included in our contract that ultimately provides me with additional protection and thereby reducing my risk? 

Based on the above figures, does this appear to be a good deal for me to enter into? 

Any input that you feel would be helpful is greatly appreciated.  I am trying to do as much upfront research as possible before making a final decision.  Thank you in advance.