Expected return on private lending

Hi Guys
What percent of return on cash, can I expect on private lending of funds for a development project in NSW. One developer is offering me 12% return with a caveat on land. My cash investment will be 250K. Is this amount fair?
Thanks

 

You would need to seek legal advice to determine how at risk your money is. The outcome may be anywhere from 12% on your $250k all the way to losing all of your $250l

But yes Mezzanine Finance depending on the deal (duration/amount/risk/security) can return anywhere between 9-18%pa

 

Development first mortgage (6-12 months) range 10-12%, LVR 65-70%. I’d be more inclined to use a fund like GEMI paying 10.5% monthly with diversified loan book and they carry first loss than muck around with this at 12% and no understanding of the risk (or how to price the debt)

 

This is high risk with a Good chance you will lose the money. Whats the caveat for? How many secured creditors are there, whats the LVR?

 

I have family who lend cash, it ranges from 10% IO to friends/family at low risk (as most everyone knows) to 15-20% for higher risk (but secured) loans.
12% isn't bad provided there's no other caveats or creditors.......
If they have other investments tied to the enterprise and it goes bad, the ATO has first claim, then banks, then lawyers, then remaining creditors/maybe you
Do you have substantial capital gains to offset a $250k capital loss ?

 

Are they giving you a first mortgage too?
What is the LVR?

 

Sounds good if it's for 6 months but if it's over 5 years it's a different story & different risk profile.

Without seeing the financials of the project it could be like burning $100 notes. As others have pointed out, what's the LVR, will there be any security left after others have stuck their hands out?

 

This mob has been doing this for a while - Home - Australian Secure Capital Fund