@Dave Shellenberger,Did you stand tall and tell HUD your real name when you turn him in.Joe Gore

The technical part is doing the paperwork to take a 2nd mortgage on the property.

I'm not standing behind what my friend is doing, I just want to be informed of the implications.

I recently wrote a post on how to stand out as a wholesaler - hope it's helpful for you: http://www.biggerpockets.com/blogs/4430/blog_posts/32194-attention-wholesalers-2-ways-to-stand-out-from-your-competition

All parties should be their own buyer or seller and u willbe 100% safe.

I have also been propositioned twice in partnering in opening a recovery house, which I turned down twice.I am wondering is it my place to give my advice to either parties of this deal, or stay completely ignorant and strictly stick to just creating the deal?

I am looking into more 3rd party management companies that are established and will research this.Do you invest out of state as well?

Some state others as John and Jane Doe, unknown parties.

That's not a bad thing, I would assume I stand to make some money if they do.

That's why due diligence is very important for you to perform and not rely solely on a third party.