I fear that my investment would lose a lot of its value. 

If they lose something that is of value to them they may have fewer resources to pay the rent.You can get cross-line discounts on your auto insurance, saving money while protecting more of your stuff.

I went through the same painful process of losing money to few so-called private lenders/scammers.

It's nerve-racking, but a rush if you can get it done and help the homeowner avoid losing their home at auction.

How much would one typically (lose) in taxes off the profit you just made.

@Brandon ArnettYou've got some great answers, but you're thinking about losing $100k in liquidity for a delta of around $2760 a year or $230 a month. 

I want the investor to profit, not break even or lose money. 

If we keep the cash, we will lose out to inflation and opportunity costs. 

And since i have a very specific niche and pricing structure I am always the last one they call and the clients usually have run out of time and are going to lose the deal and their deposit if they cant close in 3 to 5 days.. :)  So i turn them to yes or no in 24 to 48 hours so i dont hold anyone up.Just had one today  Pacific Palisades land deal  appraised 50mil but guy will take 20 mil if we can close in 10 working days.. needs dough for a deal in Vegas..

After 3 years he loses his right to redeem from me and the original owner is WAY out of the picture.