When we build term leases we have built in safeguards for the properties cashflow.

Safeguard; make sure your worst case is that you finish at a price that you could sell it to another investor and make a little.

What is your strategy to safeguard your interests during the transaction? 

There are companies like SafeGuard that get the the nationwide contracts and sub them out locally.

I see a ton of articles here and across the net on how individuals can go about finding private capital, but can't seem to find any on what steps individuals such as myself who would like to invest in others should do to safeguard and make the most solid investment for themselves.I would be starting off rather small (5k-10k or hopefully more assuming my company keeps the overtime going for a while).

What Kelvin is referring to is arbitrage (borrowing money at a lower interest rate then what you lend it out for) but the anology is a bit of a stretch for the following reasons: - Security: One is safeguarded by the FDIC, the other is secured by real estate quite often in a inferior lien position

Construction loans are disbursed as materials are needed and as work progresses not as a lump sum at loan closing, This is an additional and important safeguard protecting the lender but I know many HMLs may not do that as it's more work, but I'd not do a sizable loan (purchase +) any other way.

The risk is foreclosure may upset them to the point of where they damage your residence - character is the best judge of that, but not a safeguard.

If that becomes an issue you need to see an attorney.In your pricing, consider costs of foreclosure and time required in holding or safeguarding the property.However, any debtor may give a deed-in-lieu-of-foreclosure after the event of default and demand, so it doesn't mean you must go to court, you might get a DIL.

I would also check with a real estate attorney to make sure that the approach is legally enforceable, as a safeguard.