Have been doing business with a hard money lending investment partnership. Generally I have been collecting an average of 9.5% interest on each deal, with the deals being 12 months and backed up by 50% LTV real estate. Not crazy minimums, around 25K USD. All of my investments have performed and none defaulted, pretty solid underwriting and only on commercial stuff.
Here is my question…I can borrow against my investment portfolio at a 4.97% rate, risk being it is variable and tied to fed rate. Is it a completely foolish idea to borrow against this, lend the money via the hard money lender, and make the difference on the spread of the two rates?