Is this wise, or should I take a different strategy?

By no means was this project perfect as it was our first one but we learned so much and even with all the bumps on the road we came out winning.

However, the choice of location significantly depends on your investment strategy.

@Michael Shea I'm not a tax accountant, but I've done the rent by room strategy for over 6 years as a house hacker, and I've recognized rent by room tenants rents in the Schedule E part of the tax return.

If I lend 30k for someone to close a REO deal then I'll have their car pledged, or have a co-signor that pledges the 30k if it is defaulted.a 2nd lien position with no protection is like going to Vegas and betting on black, only on that bet you win 30k, in a 2nd lien position what do you stand to make on a 30k short term loan? 

Other strategies such as fix and flip or house hacking don't really appeal to me as constantly seeking out opportunities in hopes of generating large amounts of cash is not a part of my nature.Also, your local REIA will be an awesome resource for you.

We have great investment strategies that allows us to get higher rents than most so our investors are able to capitalize faster, refinance, get money out to do it all over again on other properties.  

That's a win-win for both parties.Let's get to the fake discount now.

That’s not the win. 

There also may be other strategies like STR and MTR that might make sense depending on location.