[spex x]

I run an RE business. I've got good relationships with private investors to whom I sell notes, etc., and I GUARANTEE a 20% return to ALL my investors for every deal that I bring them. My investors have FULL RECOURSE to collect the money that they loan me - that means if the deal doesn't work out, i'm still on the hook for the cash.

My RE business generates anywhere from 20% all to way to 150% yields, and my average yields are right around 80%. If you can't make 20% in RE, then you would never choose RE as an investment strategy. Its too much.

The point is that 9.75% guaranteed is not out of the ordinary at all for many RE investors, and its not unheard of at all to personally guarantee the money. In fact, its quite common.

I'd say that if your brother doesn't understand the investment too well, then he should probably steer clear of this deal. The high interest rate seems so juicy, but there are a lot of ways to get screwed. His friend might have all the best intentions, but ultimately not know what he's doing. I guess I'd want more security on a 100k investment than, 'he seems like a trustworthy guy'. I'd want to know EXACTLY where the money is going, how its secured, who will be spending it and on what, the strategies for making money with the investment, who will be doing the work, the trust's track record, the experience of the managers, etc.

Clearly your man doesn't understand the investment. Stay away for now, learn more, and go back to the guy later. If he's as good as he says, he'll be around next year.