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URL:  http://boards.fool.com/hi-peter-well-yes-and-no-they-can-manufacture-29801261.aspx

Subject:  Re: How to make your own annuity on the cheap Date:  1/24/2012  6:57 PM
Author:  Dwdonhoff Number:  70016 of 85663

Hi Peter,

Well, yes and no. They can manufacture these out of stuff available to us average joe types. But they can also lend the money directly.

Just to be the devil's advocate, I'll turn my hat backwards & actually argue in Brewer's favor on this point.

Individuals *CAN* make low-LTV (high equity-secured) commercial hardmoney loans, often at yields/rates of 11.99% to 12.99%. But its far from passive... its dirty lending, borderline criminal servicing, and if you're not careful in the current regulatory environment the "anti-predatory lending cops" will rip you a new yield spread ;~)

Pound for compliance pound, though, you are right... its hard to beat the commercial lending yields that the insurers can nab. The absolute dollar servicing costs on a $20 Million shopping mall loan is not all that much more than the servicing costs on a $200,000 hard money office condo loan... and the absolute regulatory risks aren't really any higher on the shopping mall (and arguably lower!)

Ray usually likes to trot out his high yield dividend plays... I know the insurance companies salt their portfolios with those as well.

Dave Donhoff
Leverage Planner
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