Hard Money opportunity vs. more apartments

[Kenneth LaVoie]

Hi
I've been an investor for two years now. 11 buildings, 35 units. Doing well and may move forward with more so that it is our primary source of income vs. our lawn care business and web design business.

But ... i now have an opportunity with a local investor to do some hard money loans. (10% rate / 1 point) - I have a "bullet list" of criteria but ... it is only a list, I've never done it before! What I need is someone to guide me to the right questions to ask (myself) as to whether it's better to pursue this sort of thing or put my money in more apartment buildings instead.

Some thoughts of my own:
1. I use lending club and loan out micro chunks of money to many many people (but unsecured) and earn close to 9%. So even though HM is secured by RE, it's all in "one basket" so to speak (how many $50k hml's can the average guy make?!) so to me, HML is "low diversity" unless you've got 1M or more to invest, and we don't want to put much mrore than 100K.

2. What REALLY happens is the guy defaults? On paper, it looks like I should have 1st mortgage. I've also heard of something called "deed in lieu of foreclosure" but not sure exactly what that is and how to setup (though we will be using MY lawyer for this if we proceed). I am prepared to "own" the property. Nice SFH in rural Maine.

Okay, that's enough out of me. Again, no looking for anyone to tell me what to do, just to push me toward the correct "questions" and give me some food for thought ...

Thanks ever so much!