Newbie Question on Medium-Risk ROI

[Brian Bistolfo]

Hi All,

New-ish real estate investor (I have a couple of buy-and-holds and am working on my first multifamily deal) and erstwhile software developer here.  I'm looking to transition to full-time RE investing in the next year or two.  It seems to me, personal finance-wise, that once you have six figures to invest you're much better off figuring out how to better leverage that money than you are plodding away at your day job...even if it's a lucrative one.  That's how I came to RE and BP...the latest episode with Bob Malecki got me very intrigued with notes.

Now that I've read a whole lot about performing, NPNs, all the ways that it's finance and not RE, the myriad things you need to know about each level of the note ecosystem and the laws that apply to each place, etc...I'm not scared off!  But I've got one foot in the water now and am wondering if notes is where I want to invest my time and energy for the foreseeable future.

I'm a hustler and no stranger to many, many months of hard work before seeing anything from it.  My concerns on whether this is ultimately the place for me for the next 5-10 years center around ROI. Obviously, how risky you're willing to go is a big factor...specializing in 2nds on NPNs seems like a good way to learn the hard way to respect the inevitable next downturn. Anyway, I can go out and get a 10-12% annual ROI with minimal effort in any number of places--buy and hold rentals, larger multifamily deals, JVs, funds, etc. Assuming I put in the hundreds of hours required to master this niche, what are my odds of seeing 15%, 20%, or even 30% annual returns in, say, NPN 1sts or NPN 1sts in combination with performing? Again, I'm not afraid of the work, but if it's years of paying dues before I'll be sniffing 15%, I can think of other routes to go. Not trying to come across entitled here...I know how hard it is to get these numbers anywhere.

Obviously goals affect the answer: I'm looking to finish replacing my day job salary with RE monthly income within the next 3 years, then scale up more conservatively (slant more heavily toward performing notes?) over the following decade.  Eventually I'll probably want to be mostly passive but it's hard to get good at something and not enjoy it :)

Anyway, if you're a frequent poster here chances are I've already read a good number of your posts so....THANK YOU for being an amazing resource for me already as I explore this exciting corner of investing!

Cheers,
Brian