Most Hard Money work like this:Rates: 10% to 14% (Most Deals are 12%)Terms: 1 Day - 24 Months (Most Deals are 6 months)Fees: 3-5 points(%) of loan amount (Most Deals are 3 points(%)) - $2500 minimum fee Minimum Loan Amount: $75,000 Max Loan: 65-70% of After Repair Value(ARV) 100% Rehab Financing Available (Most Deals require 10-20% of purchase price down or cross-collateral)Closing Timeframe: 48 Hours - 3 Weeks (Most Deals are 7-10 business days)NO PRIMARY RESIDENCES, NON-OWNER OCCUPIED ONLY, BUSINESS AND COMMERCIAL USE ONLY.

It seems a bit difficult to provide upfront 150% collateral for what you buy and then cannot use the collateral to pay for purchased liens. 

Is there another way to offer him security/collateral? 

Yes,  You can pull out a higher LTV if you go Portfolio and they cross collateralize your other propertie(s). 

For example, I can do a cross collateralization to the property you have free and clear (as long as it isn't your primary residence) or you could take out a short term private loan on that property and then refinance in a year when you've had another tax return.

This is how most workRates: 10% to 14% (Most Deals are 12%)Terms: 1 Day - 24 Months (Most Deals are 6 months)Fees: 2-5 points(%) of loan amount paid at closing (Most Deals are 3 points(%))Minimum Loan Amount: $50,000Max Loan: 65-70% of After Repair Value(ARV) 100% Rehab Financing Available (Most Deals require 20% of purchase price down payment or cross-collateral)Closing Timeframe: 48 Hours - 3 Weeks (Most Deals are 10 business days)NO PRIMARY RESIDENCES, NON-OWNER OCCUPIED ONLY, BUSINESS AND COMMERCIAL USE ONLY.

This is very easy to do and banks love to loan against cash value because they can get an assignment of collateral.3.

The agreement basically says the funder will provide the cash for the A-B transaction contingent on the B-C transaction taking place.If the B-C transaction were to fall apart for some reason, the title company would actually nullify the previous A-B transaction.So, there is no promissory note, no collateral, no interest rate, no contingency set up for what happens if the "loan" doesn't get paid back.

Let me show you how to create your own business, no cash, collateral, or even brain required.  

So when you refinance a property with a conventional loan, is the qualification for the loan based strictly on the collateral of that property and the rental income produced from that property, or do you have to prove a certain level of income beyond the rent you are collecting to qualify?