If you want to protect your friend's capital as if it were your own, you'd want to:1) Secure the loan with real estate in the form of a deed of trust or mortgage (depending on the state the property is in)2) Obtain property insurance binder with your lender as an additional insured3) Obtain a lender's title insurance policy protecting them (different than an owner's policy) and transfer all funds through an escrow closer or real estate attorney (depending on the state, the requirements for closing may differ)4) Use a real estate attorney who also practices private lender law in the state the property is located in.

YOU would certainly do it for much cheaper, likely less that $60 (cost of doorbell) if YOU did it... you would also do it cheeper if you did your own dental work.... 

While their online marketing would not have been legal when I started practicing, it is perfectly legal now. 

Hello! I am a real estate agent new to real estate investing and need some advice -
1. Which NAICS code should I use for my activities?
- Residential purchases, remodel/repairs, and re-sale (flips). I'll typically...

We might see buyer agent commission rolled into loans as a standard practice in the coming months and years.

There is no legal limit, but there is almost always a practical limit because a sponsor can only deploy so much money before they have to lower their underwriting standards etc.

Hello! I am a real estate agent new to real estate investing and need some advice -  
1. Which NAICS code should I use for my activities?
- Residential purchases, remodel/repairs, and re-sale (flips). I'll typically...

Quote from @Kevin Reinhardt: Best practice: screen and approve every adult, whether they work or not, and have them all sign the lease.I highly recommend you purchase "Every Landlord's Legal Guide" by NOLO or "Managing Rental Properties" by Brandon Turner.

And without knowing your full financial situation, it's hard to give you really practical advice.

It would be great to get more best practices from people on this topic and lets keep the post moving!