A guy at a barbecue quoted me 14 percent like it was a normal thing to say

Neighborhood thing, paper plates, somebody's kid running around with a hose. I mentioned I'd been looking at real estate and a guy I'd met twice said he was raising for a bridge position on a small mixed use building and could pay 14 percent. He said it the way you'd mention a good taco place.

I didn't say yes. I asked if he'd send me the paperwork, and to his credit he did, that night, a full package. So I spent three weeks reading it, mostly at the kitchen table, mostly confused.

What I eventually worked out: the 14 was a second position behind a bank loan at a much lower rate. His exit was a refinance into permanent financing after he stabilized the retail space, which was one vacant storefront and one tenant on a lease with fourteen months left. So the whole thing rested on leasing a storefront in a submarket where I could see two other empty storefronts on the same block from the street view.

The 14 percent wasn't him being generous. It was the number it takes to get somebody to stand behind a bank loan and wait on a storefront lease that may or may not happen. Once I understood that, the rate stopped looking like a reward and started looking like a description of the risk.

I passed. He was completely fine about it and told me to come back for the next one. I might. But I've decided I'm not putting money into anything where I can't say out loud, in one sentence, what has to be true for me to get paid back.