Investing $1ml in/for retirement

[Farzan Setayesh]

Hello BP experienced investor,

I asked in the forum, what would you do, if you are CLOSE to retirement and want to invest $1ml, I received this offer below. It does sound VERY risky to me and only sounds great for  the person whom is offering it. Please give me your feed back.... thank you for taking the time and checking it out for me..... My response was, I will never lend  to anybody without checking their track record, have to know them and have to have a first position (collateral). ..Here is, what he is offering:

Lending is a great way to invest in RE, without having to actually invest in RE. It's a great cash flow option. There are a lot of ways to structure loans. I would suggest a Non-collateralized loan at 10-15% simple interest, for 10-20 years. I'm always looking for someone to lend me that deal.

Here is how it works...the way I do it:

1 - I get the loan for $1M at these terms -

a - 10% Simple Interest (interest only payments)

b - 10 year loan term

c - Balloon Payment at the end of 10 years for the full $1M.

d - This means monthly payments of $8,333.33

2 - Money is held in an escrow account until I get a Purchase Agreement for a NNN where the Income covers both the $8,333.33 loan payments to you, and the loan payments on the NNN property.

3 - When #2 is acquired, the money needed for the down payment on the NNN is sent to the closing...not to me. Once the closing occurs, the balance of the money still in escrow is sent to me.

4 - All Income from the NNN goes through that same escrow account with instruction to pay you, then the mortgage on the NNN, then me.

#'s 2 - 4 are your risk controls so your money is safe by requiring me to actually buy the property (NNN) that covers the payments on your loan to me, and covers the source of the funds to make those payments (the mortgage on the NNN).