The near miss borrower, the one that almost qualifies for established loan "programs" is usually treated as badly as the borrower who has no intention of repayment.

Treat it as such.

How would insurance etc treat it?

These threads would appear to treat 'trusts' generically, as if all are the same.

That is, they must be treated as completely separate entities.Jeff

But if I wanted to use a friend's money, and that friend didn't get involved in the transaction details, the rehab, and all of the work, would I simply treat that person like a bank and pay them some interest?

At closing it is treated as a purchase as the warranty deed is granted.

Next week, for the whole week I'll be a social worker treating those afflicted with real estate investor syndrome, a condition of that effects many who fail to realize reality with grandiose tendencies....

I should also mention that he is a bit older - which could come into play with respect to how he plans to treat the investment.

Even accepting late fees is a just another way to allow people to continue to treat their rent and their landlord as a somewhat negotiable creditor.