Private Mortgage Investing Idea - Advice Needed

[Rajat Chopra]

I have been investing in different kinds of real estate vehicles - mostly passive ones and have sort of stumbled upon an idea.  I was thinking to put together an Investment Offering of sorts but wanted to get initial feedback from others on whether this is something that would be appealing as an Investment Offering or not. 

General Overview

An RE Investment firm ("Firm") creates private mortgages with individual home buyers.  The Firm targets home buyers who do not have good credit but generally speaking they have cash savings and good jobs or businesses.  The program would allow such Home Buyers to find their own home that they want to live in.  Then the Firm would purchase that home and create a 30-year Note to lend the home to them at 9.9% Interest.  Once the Home Buyer finds the home they will put 15% down payment in escrow to express their interest in the home.  The Firm will seek to source the remaining capital from Investors to purchase the home to create the Note to lend to the Home Buyer. 

Investors will receive 8% Return paid out monthly.  The duration of the investment will be for 30-years - or until the Home Buyer pays off the Note, whichever comes first.  The Firm will make sure the investment is secured by Trust Deed and Promissory Note thereby securing the Investor's investment as well. 

Just wanted to see if this idea has any merit and if anyone thinks that investors might be interested in this type of investment.