If things go bad you can walk away and lose nothing.

If they don't bite now people have a way of changing their mind the day before an auction and they realize they are going to lose the house.

Turn key single family rentals are a hard way to lose.

Make sure you can get into a conventional loan or you can flip it without losing money.

When conditions get like this, in any type of market, it's a signal that a significant number of people are going to lose money - whether it's from buying stocks that look like they'll just keep going up, or buying houses that are in a bubble. 

Then I was hooked bought a rental jointly with an older guy who was a realtor because the bust made him lose his construction company. 

This protects you if the tenant doesn't pay you won't lose any rental income at all and it won't cost you the eviction and you won't be chasing them for the next 10 years hoping for a few scrapes of their money.

I was the high bidder for quite a while and could have stopped bidding below the reserve, but I did not want to lose the property and continued bidding until I hit the reserve.  

Account Closed  I do a little of this and I would only deal with someone I can eye ball.and size up.. too many weirdo's and wanna bees on the internet or on bP or linkedin or facebook.I also owned a sizeable HML company and of course we advertised and many times did not meet our borrowers but if they were local we always had them come in.but I had a Accurant program to run them through that would detect fraud and I did that first contact.I have gotten a few loans from lendinghome and they do a back ground check which I think is great.But in general private lending is by non professional lenders known to you.. not people you meet on the internet that's a good way to lose your private money LOL

@Kenneth Shelley   another way to put what Don mentioned is you may want to walk before you run.if at this point in your career your asking these very basic questions your not really qualified to lead your investment group.. you may make it ok but you could very easily go through a steep learning curve and lose your close friends money and based on my long career working with investors I can tell 1000% you lose their money in a RE deal and you are no longer friends no matter how close you think you are now.as for some constructive feedback here Is what I would consider if I was in your shoes.I would get my Real Estate license so you can prove to them your a professional and care about your craft..