There is no 100% guarantee out there.Managing your property properly and having great insurance are probably the two best ways to protect yourself.

But it's difficult for me to just hand over money to someone I've never met, when I have so many friends (and have read so many stories here) who have been ripped off by contractors.How can I protect myself?

Real estate is often full of unexpected and expensive potholes and you don't really sound geared up for that.. 

You feel you have to rebut my comment to bolster/protect your business that’s fine, but I would suggest you steer clear of exposing client financials unless your in the business of fighting legal suites rather than real estate. 

If it is returned in full, the pref equity will receive their accrued pref before common equity receives their accrued pref + share of profits.So, common equity has "unlimited" upside but really no downside protection.

That's a way to get both anonymity and liability protection.

With some of my clients, I've seen discounts of 30% to 90%.Here is a real-life example: I invested in a $50K note; it was second TD but with significant equity (over $200K) protecting my investment. 

The big one to read up on is the NYS Housing Stability and Tenant Protection Act of 2019. 

Generally speaking solid insurance and a good umbrella policy will provide ample financial protection for most liabilities.

FHA has some time required before reselling  a property you just purchased, 3 months i believe but everything i’m saying must be validated for your own protection doing these things.