I buy and sell properties that have higher risk of title problems due to the judicial sale and since he is doing all the legal work he wants to limit his exposure …what about REO sale?

You can expect to pay more for better coverage, so I'd encourage you to be diligent about looking at the exposures and comparing coverage.   

Chances are, with only a handful of loans as their total exposure to the market, they are not seeing enough of the market to really understand how flawed the plan could be.

That cash allows me to do even more deals rapidly with the net outcome superior to what I might have achieved carrying modest notes over the long term with the problems and exposures I mentioned. 

Hence, growing up, I had indirect exposure to real estate and have seen the good (and bad) that come with owning real estate.

I understand that the expressway separates the facility from the traffic flow right in front of it, but it gets a lot of exposure and there is residential all around it.For $425,000 I am looking into this.

I guess your worst exposure (taking out any fines or fees) would be rescission (which we all know isn't really practical given the LTVs of most loans).

Plus, in rehabs, you can usually get out quicker than spec buidling so your exposure of time is smaller.

Find out exactly your exposure before you make an offer. 

You will get more experience in a joint venture, but less exposure as a fund investor since your investment is spread across multiple assets.