buying out a friend

Does the old adage of not doing business with family or friends hold true in investing?

Are you more careful to put it in writing or just to explain it better. I know we’re supposed to tell everyone we can what we do (invest) but now a friend has asked me to buy his house. It’s a good deal, by the numbers and I’ve offered to just help him sell it on the market.

So do both sides laywer up or does that cause more trouble?

Thanks :banghead2

I am always leery of doing business with family and friends. Mixing money and emotions is always a recipe for disaster.

I would JUST SAY NO to buying out a friend. Conducting business with friends is a good way to lose your friends.


Think about it…

You buy it and make money off it, he’s going to feel like he got taken. He might not EVER say it, but come on, if you make $25,000 off HIS home he’s going to resent it.

Or you buy it and LOSE money on it, then you’ll feel different because EVERY TIME you set eyes on him you’ll be reminded of your $XXXXX dollar loss. Maybe it was because of something you missed or he didn’t know about, but either way that’s a crappy conversation.

It’s human nature man, it’s not a shot at you or your friend.

There’s a great old saying that goes…You never REALLY know a relative until you have to split an inheritance with 'em.

There’s a reason for that. It’s called MONEY!!!

Playing devils advocate…

Suppose I suggest he have a “cut” of the profit when I sell?

How much money(profit) are you talking about???

Probably 40K. Let’s say the percent goes down the longer I hold

Example 60/40 me if I sell in 1 year and 70/30 in 2nd year etc

With increases in value (in this area about 7%) it’s still a good deal for me

I guess I’m new and want to make it work. If I had 50 of these under my belt I’d walk, but not yet

Why doesn’t your friend just sell it for what it’s worth???

Because I can close yesterday vs putting it on the market. That’s my guess

If I had to wait 60 days to make $40,000, or sell it to you today and make $5,000. Maybe it’s just me but I would wait. Is something missing here?

I agree with Jared, this doesn’t make sense.

IF it sells in 60 days. I’m all for bailing on this, that’s why I asked the questions

If I may

I have a very similar situation
female friend got too much house

been struggling with payment
along comes me her friend with A1 credit
new to REI , I have 1 rental property generate a couple hundred a month
in income

thinking how can I help and make some cash
not sure how much but I know there’s equity
and I’m thinking $$$

she would like to somehow stay in the prop

= BAD IDEA ???

No, not a bad idea - it’s a TERRIBLE IDEA!


That’s why I like it here good honest info

Is she staying in the property for FREE? If not, can she make the rent payment to cash flow the property? If so, why doesn’t she just keep it?