Please help...first deal. I need direction

[HEATHASH]

I met with a guy whose credit is a joke, no job...invests in real estate.  He tells me the properties he owns.  Most are in horrible areas and value maybe 20-40k.  One property is assessed at 44k.  Low end it might sell for 35k.  I haven't seen inside.   He said house is for sale w/ agent now.  This is not his primary residence.
What he wants is 15k for 60 days and will pay 3700.  He is basically using the money for a separate investment.  This guy would skip town if the money wasn't securred.
First thought was mtg.  If he doesn't pay decent equity possition.  But the 15k would tie up all my funds from the equity in my own home.  
Here was my thoughts on this:
17k 1st to cover 10% pts(me) then title search and appr...borrower would pay both upfront and atty fees.
Rate around 19%  Then put a prepay penalty of 6 months interest and a 1 year balloon.  This gets me to about 3700.  
My next thought was if I have to foreclose, can I afford it, and how long could it take?
So the other way I was looking at it was to TRY to convince him to sell to me for 15k and at same time draw a purchase contract from him for 18750 with an expiration of 60-75 days.  
My concern is 2% transfer tax both times...not a lot, but trying to avoid and also atty fees both times.  
Is there a better way to do this?
I don't trust everything this guy says.  

[Dave T]

Why do you want to do business with someone you don't trust for such a small payday?

It is a good idea to secure your position and have a reasonable chance of getting your investment back, but what will you do with the investment if you have to foreclose?  Your payday could be eaten up by holding costs and selling costs if the deal turns sour.  

[IWINUWIN]

I agree

Minimize the risk-Move on. Keep an eye on it tho. If his credit is so poor and continues to operate as he does, somethings gonna give at some point. Sounds like he is floating investors money from deal to deal. He may become a real motivated seller at 1 point in the future, then move in w/o all the nonsense. In the meantime, find something better. There out there, but it takes work to get em.

Anyone can get a "deal" - the good ones you need to work for.

Just my opinion.

KEC

[niravmd]

someone's offering you 24% rate of return.
at this rate, i would think twice even with people i trust and know for years bcoz
the returns always justify the risk. this is high risk.

i'm happy giving my money out at 10% where there's little risk.

i can borrow money from my friends at 5% or less bcoz they trust what i do.
if this guy has been investing for a few years and still hasn't built up the credibility
to borrow from people who trust him, i'd be very skeptical.