His family says he has money and they have his debit card and want to pay back two months… doesn’t sound legal.

You pays your money, you takes your chances :)

Unless you have considerable cash as well to put down on a home I would say not to do it.

Private money lender How did you add value to the deal?

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if your ARV is 200K, for example, and it needs a medium or greater rehab, you probably need to buy under 100K.  150K won't cut it, you'll lose money.

I am curious how they plan to make money after spending $5k to furnish and another $200 for utilities monthly, ON TOP of the $1800 rent.

Politicians will continue to pander to tenants and assault landlord rights until landlords organize and spend money to push landlord agendas.

So, with no foundational knowledge of real property, and no capital, his only alternatives are (1) “bluff” the homeowner into thinking he has the money and intent to close the purchase himself and or convince the homeowner he has an extensive list of cash ready interested buyers (“partners”) with whom he’s done dozens of prior deals or (2) pack up shop, write off the money invested in mentoring to a worthless investment, and decide IF real estate is right for home.  

Their longer term goal is to use the money you give them to put you out of business.