Comparing a 9 percent mREIT dividend against an 11 percent private rehab loan

They aren't comparable, and the reason is concentration and marking.

Your 50k to the contractor is one loan, one borrower, one house, one exit. If the rehab stalls or the market softens in that zip code, your outcome is binary in a way a diversified portfolio isn't. In exchange, nobody prices your note daily. You either get paid or you don't, and in between there's no screen telling you it's worth 84 cents. That absence of a daily mark feels like stability and isn't the same thing as stability.

A mortgage REIT is the opposite on both counts. You own a slice of thousands of loans or bonds, so no single borrower matters, and you get a price every second the market is open, including the prices you'd rather not see. It also uses borrowed money to amplify a thin spread, which your private note does not, unless you're borrowing to make it. So the 11% you're offered is unlevered and the 10% from the REIT is levered several times over on a much smaller underlying spread. Same headline number, different machinery.

The part that doesn't show in either yield is what happens when things go wrong. On the private loan, you foreclose, and that means a lawyer, a timeline that runs from a couple of months to well over a year depending on which state the property sits in, and possibly finishing the rehab yourself. On the shares, you sell in an afternoon and take whatever the market gives you.

If you do the private loan, get a title policy and have an attorney in that state prepare the note and mortgage or deed of trust. That's not optional work.