There are many pit falls that we have heard of.The money pit being one of them.

If I were to do something like this, what should I be aware of and what pitfalls should I look for.What he's looking for:Investments in the 30K-40K range (you're welcome to invest more if you like)12-18 month term What he's offering:13%-14% returnPaid out monthly Here are the highlights: -Business is a boutique lender looking to expand capital-Provides short term loans to builders, both commercial and residential-Long track record of success -12-18 month term-Offering 13-14% annual return, paid monthly-Your money would be held in a real estate attorney's trust

There are alot of pitfalls in this situation.

That is a long time to wait for your return with many potential pitfalls in the way (payor BKs for delay, gets offers on the property that fall through, but delay the process, etc.)

a small unit you can learn the "pit" falls and deceide if this is for you before you are stuck a 4 unit apartment.

Also, does anyone have any pitfalls to beware of?

Be upfront about the pitfalls that can come up and find a competent broker who deals with a lot of investment loans because, they know which lenders will loan and which ones stick to their seasoning rules.Hope it helps.Jim

I could have - and did - google "5 year option arm pitfalls", to figure out what that really means, and what the risks are.

My primary is a condo, so I know some of the pitfalls.

Does anyone see pitfalls?