My choices are buy another rental or lend the money for a 10% return. Anyone have experience with private lending investments? Any downside? What kind of return could i be missing out on? Looking for pros and cons. Thank you!

@Ryan Kaysen - Really it depends on what your goals are. If you want to build a real estate portfolio and deal with the semi passive aspects of managing a property manager and contractors and dealing with banks. etc...then buy more rentals. If you want to be more passive than lend the money to other investors, or consider buying notes. The two are quite different and so it's not really a matter of which is better because it depends on your goals. If you're not sure what your goals are than I'd encourage you to read @Dave Van Horn 's new book from BiggerPockets Publishing, Real Estate Note Investing. In the book he talks about his transformation from working in real estate, to investing in real estate, to being a private lender, to owning notes. I think it's one of the best all inclusive pictures I've come across that really talks about the differences of investing types. 

If you want the quick answer without having to read the book though you should get plenty of feedback here. Many investors end up doing both...actively buying rentals outside of their qualified retirement account and then inside their self-directed retirement account they will lend the money or invest in notes. Gives you the best of both worlds doing it this way...but again depends on what your goals are. 

I could go on about this for hours...so if you want to keep chatting feel free to PM me. Or check out the meetup in Philly hosted by @Troy S. or the South Jersey Meet-up hosted by @Justin Eaton or the DIG meet-up hosted by @Steve Babiak . All of these can be great local resources to connect with other investors and discuss more as well. 

Hey Ryan,

I agree with James on what your goals are. If you are just looking for your money to bring in more income, then I would go with private lending. The majority of private lenders that I have met have already built and sold a multi-million dollar portfolio. As far as building your net worth as well as depreciation and other tax advantages, I would go with acquiring more properties. Feel free to PM me if you'd like to chat more!

Some interesting related reading:

https://www.biggerpockets.com/forums/49/topics/555...

Originally posted by @Steve Babiak :

Some interesting related reading:

https://www.biggerpockets.com/forums/49/topics/555...

 That's a great thread Steve. Thanks for posting it here. I'm very curious to see the answers to my inquiries there. 

Good thread. Interested in learning more about hard money lending. I got a guy that wants to borrow money towards a property purchase. Trying to figure out how to go about it from a legal perspective. Looking for guidance. I think OP would benefit from the info as well, to gauge the headache involved with PML. TIA!