2nd Position Investment

[Brian M.]

Hi all. New to this forum and the RE investing world for the most part. I have done a few deals through a developer/friend mostly on the lending side. Most of the money I'm lending is in "2nd position" with this same friend. I'm curious how safe/smart these investments are and if I'm getting enough return for my money. Look forward to hearing back from some experienced investors to grow my knowledge base and make intelligent investments. Here is the latest deal that has been sent to me. Thanks in advance for thoughts and help:

Here is the situation..

It is on a home we have where the bank would like us to pay down the loan a bit because we are choosing to rent it, so that is what we would use your investment for.

Debt and Equity Stack would look like this:

1st; Bank Loan $650,000

2nd: You, $40,000 @10%

3rd: Equity, approx $360,000 (conservative based on $1M+)

Home value is $1M+, I've attached 3 listings of homes that are arguably worse than ours listed $1.1M-1.3M.