Timeline for Is this investment opportunity problematic?
Current License: CC BY-SA 3.0
31 events
| when toggle format | what | by | license | comment | |
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| Oct 5, 2016 at 17:20 | comment | added | David Schwartz | @TTT Nothing in the statement suggests the sale of the existing house will be enough to pay for the new house. He's just saying that when he sells the existing house, he'll be able to give Mason back his contribution plus 15%. | |
| Jun 23, 2016 at 23:16 | comment | added | Mason Wheeler | @Ángel Because they live over 2000 miles away... | |
| Jun 23, 2016 at 21:50 | comment | added | Ángel | That your friends are honest and trustworthy doesn't mean that the email itself is not a scam. Moreover, why would a close friend propose you such sensistive matter by email instead of explaining in a face-to-face meeting? | |
| Jun 23, 2016 at 19:10 | comment | added | user2338816 |
You first got an e-mail and later sent a reply with a link to this page. Have you actually talked with them? Not to avoid a "scam", but to get a solid feeling based on personal contact. There're probably three people I've known in my lifetime (at 66 yrs old) that I'd seriously consider doing the same for.
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| Jun 23, 2016 at 19:00 | answer | added | nugae | timeline score: 2 | |
| Jun 23, 2016 at 18:06 | answer | added | Five Bagger | timeline score: 2 | |
| Jun 23, 2016 at 17:11 | answer | added | DKATyler | timeline score: 3 | |
| Jun 23, 2016 at 14:40 | answer | added | teldon james turner | timeline score: 0 | |
| Jun 23, 2016 at 11:57 | answer | added | Agent_L | timeline score: -2 | |
| Jun 23, 2016 at 11:19 | comment | added | Ben Miller | Related: What are the pitfalls of loaning money to friends or family? Is there a right way to do it? | |
| Jun 23, 2016 at 10:48 | comment | added | k1308517 | Trust no one is the only comment I can think to post. | |
| Jun 23, 2016 at 9:35 | answer | added | Dennis | timeline score: 6 | |
| Jun 23, 2016 at 8:49 | comment | added | CMaster | I'm guessing they are thinking of taking a mortgage to buy the new place, or that it might be necessary. | |
| Jun 23, 2016 at 1:11 | history | tweeted | twitter.com/StackFinance/status/745786380215848960 | ||
| Jun 22, 2016 at 19:31 | comment | added | Bardicer | Having just closed on my own home about 8 months ago, you can definitely take out a "loan" for a down payment. It just has to be documented which is more paperwork and a pain in the rear. A "gift" just has to have a letter that says you're "giving" them the money with no expectations of having it paid back instead of having to document the terms of a loan. | |
| Jun 22, 2016 at 19:22 | comment | added | user662852 | If you really want to do this, what about becoming an equity partner in a partnership to buy the new house, with an agreement (like a call option) for your friend to buy you out at +15%? No loan, no gift. | |
| Jun 22, 2016 at 18:59 | comment | added | Mason Wheeler | @BrenBarn Agreed. I sent a reply with a link to this page, asking them to look over the concerns that have been raised here and hopefully clarify matters. | |
| Jun 22, 2016 at 18:57 | comment | added | BrenBarn | It sounds like, at the least, you would need to sit down with your friends and get a much more complete explanation of exactly what their plan is. | |
| Jun 22, 2016 at 18:43 | comment | added | Grade 'Eh' Bacon | @DumbCoder I doubt the friend of OP's wants to extensively document the plan to commit credit fraud; damn the luck. | |
| Jun 22, 2016 at 18:13 | comment | added | TainToTain | I don't understand why he would want the money as a gift if there is no mortgage involved. The only reason to do so is because lenders won't allow loans to be used for down payment. If it's for a deposit, the buyers won't care where the money came from (and it would be unusual for them to ask for the source). | |
| Jun 22, 2016 at 18:10 | history | edited | Mason Wheeler | CC BY-SA 3.0 |
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| Jun 22, 2016 at 17:59 | answer | added | TainToTain | timeline score: 5 | |
| Jun 22, 2016 at 16:35 | comment | added | Dheer | Remember your friend has no obligation to repay a GIFT. That is definitely one of the risks here. With a formal loan document you have something to go after. | |
| Jun 22, 2016 at 16:34 | answer | added | Brythan | timeline score: 34 | |
| Jun 22, 2016 at 16:32 | history | edited | Dheer |
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| Jun 22, 2016 at 16:18 | answer | added | JTP - Apologise to Monica♦ | timeline score: 6 | |
| Jun 22, 2016 at 16:08 | comment | added | DumbCoder | Are they willing to put this down on paper in legal terms ? Or put up some type of collateral which is legal and can be enforced in court ? | |
| Jun 22, 2016 at 15:48 | comment | added | TTT | OK, but earnest money could be as little as $1000, maybe more depending on the purchase price. Do they really not have even that much on their own? How much are they asking for? | |
| Jun 22, 2016 at 15:44 | comment | added | Mason Wheeler | @TTT The "down payment" may be earnest money. This is an ordinary friend, not a sophisticated investor, and the terminology may not all be 100% accurate. | |
| Jun 22, 2016 at 15:41 | comment | added | TTT | This doesn't make sense. If the sale of the old house will provide enough to cover the loan + 15%, then it would also be enough to cover the needed down payment amount. They don't need the down payment until closing, and with the contingency means it's after the other house is sold. They only need some earnest money to make the contingency offer, which can be much smaller than the down payment. So, why exactly do they need money right now? | |
| Jun 22, 2016 at 15:32 | history | asked | Mason Wheeler | CC BY-SA 3.0 |