Also consider an HSA health savings account and if when kids come into the picture an ESA.

Your suggestion would fall into the organization cost in my above picture (pre business beginning).

This would protect you against lawsuit from people getting hurt on the property.You can buy a building policy as well if you want to cover damage to it, but it does not sound like that is the purpose of the investment. 

Currently he only needs funding to help cover the rehab completion.Here's a summary of the dealARV: $315k (I've verified that this is in the ballpark +/- 10k)Purchase Price: $130kRepairs to date: $32kAdd'l rehab estimate: $25k << my pieceProposed terms from my colleague:I am offering 13% annual on a 12 month note with a guarantee of minimum 10% return.

Hi @Mike Day, I would avoid doing a blanket loan covering more than one property.

Meaning your income would have to cover both notes.

You have to go through the pictures or better go and see them as potential tenant. 

Its my understanding that it would be a separate contract spelling out all the different scenarios that need to be covered as owners/landlords, exit options, disputes, etc. 

Any pictures of "tenant-proof" bathrooms?

If the builder is willing keep the project in his name while constructing then indeed when you sell you can execute a 1031 exchange and buy the new property when it is complete or when the value of it is enough to cover your exchange but within the 180 day limit.You just can't take title to the new property until the old property sells in order to complete the exchange.