Your primary strategy should be to have the Contractor and all Subcontractors add you to their insurance policy as Additional Insured. 

This is a fundamental component of the BRRRR strategy that I have yet to understand.Or, does it not make sense for the friend to invest in this deal if they're primarily looking to flip? 

Just depends on your strategy but my best advice is to take a drive through those areas.

Legitimate, in this case, means that the entity is part of an overall business investment strategy whereby you have a business plan, tax returns, and the funds you seek are for further business expansion.If, however, the LLC is a stand alone entity, is not profitable, or is not legitimate, then your probably better off putting into your personal name and securing funding that way, or still talking to local or regional banks to see if they have any loan programs available where you might be able to secure financing.

@Kash Tacke I'm a big fan of ADU's in general especially here in the mid west, yes you could potentially be on the front of the wave, but housing density is the solution to the affordability issue, anytime you are investing with affordability in mind is a great strategy to me, and sound like there are some incentives or at least supporting winds form the local city, that in itself seems like it would be worth at least approaching an architect or contractor to bid up some plans or concepts to take tot he city.  

I've seen the data and you can make at least 15% ROI, but it does require work. 

We have data to look back to for direction on our path forward, do we not? 

These are all lower $ properties and not the strategy you use.

This gives much better diversification protection across geographies, asset types, strategies, investment subclasses etc. versus putting all the eggs into one basket.The downside is that it's not for everyone, and a person has to be comfortable with turning over control to someone else.

I could easily train virtual assistants to handle these payments and have an app created for encrypting sensitive data for facilitating the transactions through financial service partners from my main line of business.