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Updated over 7 years ago on . Most recent reply

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Minh Le
  • Pearland, TX
21
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67
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Too good to be true?

Minh Le
  • Pearland, TX
Posted

Hi all,

A realtor/investor reached out looking for $12k to help fund a deal and promised a net return of $24k to be paid 60 days after the property has been rehabbed and listed for sale. We have since defined the listing date to be 4/10/2018. So by 6/10/2018, I would walk away with 100% ROI.

I asked her why they are not going to a lender for the entire cost instead, and she responded that they have already borrowed all the money that they can, and needed this last bit to close. Is this too good to be true; to receive 100% return on a 3 1/2 month Loan? Or does this happen fairly often in this industry?

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Joe Splitrock
  • Rental Property Investor
  • Sioux Falls, SD
18,565
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Joe Splitrock
  • Rental Property Investor
  • Sioux Falls, SD
ModeratorReplied

Yes, it is too good to be true. 

Something doesn't add up. Guaranteed 100% return in 60 days and she will pay from personal funds. If she has $12K in personal funds, why wouldn't she put the money in to get the 100% return 60 days later? I would only lend that kind of money if it was secured against something, such as the property itself. 

  • Joe Splitrock
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