Originally Posted by Wavewacker
That may be great too, with RE funding, you are secured by the broker as a loan to them and is used for stated funding transactions, you need to due your due diligence on the brokerage, not the deals, so it's hands off on auto pilot for as long as agreed. The yileds will make your BAII financial calcultor smoke when discounted notes are flipped, these don't happen everyday or even every week, but a 30, 40% discount is not uncommon, I have done 50% and in 30 days the property can be refinanced at par value. So, you buy a 80k mortgage for say 55k and get 80k or if you pay costs, say 75k in 30 some days, figure the annualized yield from that money being out for 45 days......keep a fire extingusher handy, LOL.
Not to remain off-topic but here is the big problem I see with this... you are still putting all your eggs into one basket. You have one big egg and one basket. There are a million things that could go wrong with a complex transaction like this and frankly, most investors are not sophisticated enough to grasp the concepts or rationalize the tax consequences. For those that can and have the right resources available to them (accountants and attorneys) the pool is further culled by the time required to develop and complete those type of real estate transactions. IMO.
P2P Social Lending is not difficult to grasp, takes very little time, and counts as ordinary income
so the taxes
are easy to figure. despite the ill-informed posters that have never ventured into this type of investment, a few simple rules provides lower risk coupled with higher returns than most investments.
With that said... I would not pile all of my cash into an single
category of investment. Although P2P lending doesn't count as active investment unless you are carefully reviewing each and every loan, it is wise for most people to avoid active investing and to diversify across a broad class of investments such as P2P lending, real estate, personal ventures, jobs, stocks, muni bonds... whatever, so P2P lending is just an additional leg of income