So, you want to find the best rental property deal and invest some hard-earned money.What about the potential to make some serious shekels by becoming the mortgage bank instead of the landlord? Where else besides private mortgages or so-called “hard-money lending” can you find a 10% rate of return in a term of three years?
Thayer, who’s been in the lending business since 1986, said 90% of his deals are for one to four units. Half the deals are seconds with an average loan amount of $300,000 or $600,000 for first mortgages. He typically stays under $3.5 million for any deal. Even though Thayer services $110 million in hard money loans, he thinks real estate rentals are still a better deal. “I would have made more money sticking it out in real estate,” he told me.
Back to the money. What about the staying power of these lofty 10% returns on hard-money investing? Can you get an even higher yield if we see more inflation?