Boys are confusing

I'm so confused with this guy I know.
We've kissed in the past (years ago)
And he's fancied me before, but we didn't Persue anything because I was moving away.
Recently he's been staying with my brother.
I'm sure he's been flirting with me.
He says I'm so cute because I'm smaller than him, same about our hands and feet.
He always chooses to sit beside me and put his arm around me and rub my shoulder.
He puts his legs over my lap or if I'm lying down he puts my legs over his. 
He jokes with me and compliments my music taste an calls my ex stupid for letting me go.
Try's to tickle me all the time.
Offers to clean and cook for me. 
YET he's texting another girl, bringing her to my house then he sits and 'flirts' with me. 
He says he likes this girl (believe me I've asked) 
But I can't shake the feeling that he's flirting with me. 
And the problem is.. I'm beginning to fall for this guy, and I don't want to be left broken hearted. 
Should I leave their budding 'relationship' alone and try distance myself from him.. Maybe wait until they break up to get in contact with him again?..
Or should I be honest with him and tell him how I feel?
Another thing to keep in mind is that this other girl is sisters with my bestfriend. 
And this guy is bestfriends with my brother.
A lot of potential friendships to ruin:(