@Jamie Bateman has also shared some additional points for you to look at.In addition, you may want to consider the following:-Borrower's credit history and financial details-Compliance requirements for the appropriate state where the subject property is located-Your own personal risk tolerance level-Quality of the loan collateral and documentation-The rate of return that you will earn on the investment, as opposed to the face interest rate of the note

Just to add: as a first-time real estate investor, it's important to carefully consider your options and make a plan that aligns with your goals, risk tolerance, and financial situation.Here are some things to consider:-Buying a multi-family property and renting it out can be a good way to generate income and build equity over time, but it can be competitive in some areas and may require a higher initial investment.

For the sake of your risk tolerance you should know the probability of being paid. 

Personally this is not something I would tolerate, and certainly not someone I would put on a long term lease.  

This will all depend on your risk level/tolerance as well as future goals.

It took us years to learn how to create a strategy and a plan and to set our goals in a way that matched up with our risk tolerance and personal circumstances.

To do that, I suggest creating a concrete set of criteria based on your investment goals and risk tolerance.

However, if you have the time and the tolerance for risk, it can be a great way to generate additional cash in order to invest.

But as I stated many years ago when I was on the BP Podcast, that the biggest mistake investors make is an inability to properly understand and measure risk, and thus they deploy their capital into assets that do not match their personal risk tolerance. 

You'd need to be clear on your risk tolerance and financial ability to withstand loses.