Passive 12-15% Return

[Rick S.]

What is a realistic return I could expect on JVs in the note space? I am looking for a 12-15% return on $100-400k. 

[Don Konipol]

@Bob Malecki and @Jay Hinrichs are exactly right. To get 12 -15% in today's low interest rate environment requires one of three variables (1) work the note - usually a non or sub preforming note or (2) accept a higher risk, i.e, second lien position, very high LTV, borrower with very low credit scores or bad credit history, D property in undesirable areas, etc, or (C) get VERY lucky!

Rates on medium risk loans are in the 9-10% range; low risk ranges 6-8%.  Of course there was the case of one of my investors who couldn't accept that I was earning money every time he invested with me.  His very first investment he did himself was a $200,000 second lien on a condo behind a $1.2 million first, on a condo worth at best $1 million.  And then he asked I would "help him out".  Like there was something I could do!  

Just three week ago I got a call from one of my investors who said that he had been unable to get into any of our 12% loan syndications (depending on size they sell out in between 5 minutes and 2 hours), and was not willing to accept our 10% syndications.  Thursday he calls to tell me that he has placed $125,000 in a loan that pays 40%.  I ask if it's backed by real property.  He tells me that the security is a 3rd lien on restaurant equipment.  You can't make this stuff up!