A process is disclosed for preparing products such as 2-hydroxytetrahydrofuran which comprises contacting unsaturated compounds such as allyl alcohol with carbon monoxide and hydrogen in the presence of a rhodium carbonyl catalyst and a bi-solvent system. The bi-solvent system includes an aromatic solvent and an amide solvent and may be materials such as p-xylene and acetamide. Such a system provides for easy catalyst recovery since the rhodium catalyst is selectively soluble in the p-xylene whereas the desired product is conversely selectively soluble in the acetamide phase.