Need some feedback on a potential deal

[Evan Loader]

Good morning BP community. I am reviewing a potential private lending deal as the lender of a rehab fix and flip. I would appreciate what you think of the structure of the deal. The numbers are as follows - 

Purchase price - $180,000

Repairs - $150,000

Final projected sale price - $475,000(comps with similar layout/size in same neighborhood are going for $495,000-$525,000.)

The investor has a first-lien hard money lender lined up for $306,000. They need an extra $56k to to cover a portion of purchase price and closing costs, monthly holding costs, and the first payment to the contractors(required by first lien lender). They want me as an investor to loan them $56k as a 2nd lien recorded after initial closing(first lien holder won't allow 2nd lien to be recorded until after initial closing). They initially offered me 14% for a 10 month hold, with the interest paid at the closing for final post-rehab sale. But they re-calculated their numbers and offered me 20% for a 10 month hold, with interest paid at final post-rehab sale closing. 

What do you think? I don't want to provide details as to location and specifics of the house, just need some feedback on the numbers/structure of the potential deal. Thanks!

[Marcus Auerbach]

Trust your instinct. Never go in 2nd position and risk your principal without collateral!

I'd rather make 8% with 100% of my principal back and safe every time, than 20% with the chance of loosing my principal. Might as well take your money to Vegas..