Understand the Process – Before lending, make sure you have a solid grasp on the private lending process, terms, and risks.

I find it's very personal, and dependent a lot on your goals, resources, risk tolerance, location, experience, etc.

I don’t know why anyone would take that risk for little reward.

The world values your money at 3 or 4% with no risk. 8 or 10% with moderate risk.

It looks like a great idea on the surface but the numbers don't stack up from a risk/return point of view as far as I'm concerned (it could be different for you depending on your return expectations).

It's a lot quicker, and you can minimize the risk substantially.

I know there are a lot of options, especially since they are family and willing to carry the loan. 

The properties have unique advantages accruable to an investor who is willing to do their homework and take calculated risks.

So if I do a good analysis of the property (including all the costs) and the property generates monthly CF with a DSCR above 1.1, I would be removing a big risk because the numbers add up.

This factoring includes the presence of competent contractors who can limit unforeseen surprises and costs.Myth 2: They're Too Risky to Invest InThere is risk in any investment; however, distressed properties are not inherently riskier than any other real estate investment.