Do you agree it is bad idea? Or is it?

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Do you agree it is bad idea? Or is it?

Tony Marcelle
Bessemer, AL · Member since 2014 · 581 posts · 32 votes

My real estate partner called me up with some ideas to make some money. As always, his "idea" involves spending thousands of dollars on some real estate investing program. I want no part of that. Anyway, he now wants to get a $17000 loan using a line of credit. He recently lost his 9 to 5 job, so he's desperate for income. His credit score is bad, but my credit score is good. He is pleading with me to co-sign on the line of credit loan. My gut tells me don't do it. He goes on to say I have to take risks to make something happen. I understand that, but I am not doing great financially as far as my own income from my day job. I want to make some progress in real estate, but should co-signing for that $17000 loan be the solution? He really needs my help and I don't think I am able to be a cosigner. He make it sound so easy like the property will pay back the loan in no time. I don't know about all that.

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George W.
Investor · NJ · Member since 2018 · 869 posts · 921 votes
7y

I don't think it's a bad idea, I think it's a horrible idea! He obviously has issues if he lost his 9-5, has poor credit and is desperate for income. Those are three major red flags. Maybe you should start looking for a new partner. 

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  • George W.
    Investor · NJ · Member since 2018 · 869 posts · 921 votes
    7y

    I don't think it's a bad idea, I think it's a horrible idea! He obviously has issues if he lost his 9-5, has poor credit and is desperate for income. Those are three major red flags. Maybe you should start looking for a new partner. 

    4Reply
  • Trey Knight
    New to Real Estate · Covington, GA · Member since 2019 · 42 posts · 26 votes
    7y

    Why does his name need to be on it?  Maybe sign for it alone?

    0Reply
  • Tony Marcelle
    OP
    Bessemer, AL · Member since 2014 · 581 posts · 32 votes
    7y
    Originally posted by @Trey Knight:

    Why does his name need to be on it?  Maybe sign for it alone?

    My name or my partner's name.

    0Reply
  • Greg ParkerBusiness Member
    Realtor, Contractor, Property Manager · Montgomery AL and Kowaliga, AL · Member since 2017 · 663 posts · 536 votes
    7y

    I may not know all of the details, but "NO".

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  • Jeff StrickerPro Member
    Dothan, AL · Member since 2018 · 10 posts · 4 votes
    7y

    Sounds like your instinct is telling you "No." Sounds like good advice.

    0Reply
  • Adam Bush
    Member since 2019 · 26 posts · 32 votes
    7y

    I wouldn't do it

    0Reply
  • Tony Marcelle
    OP
    Bessemer, AL · Member since 2014 · 581 posts · 32 votes
    7y

    @Adam Bush @Jeff Stricker I am leaning towards no too. I feel bad about his situation though, but I sleep better at night not having to worry about what happens if he can't pay off the loan then I am on the hook. I am thinking that he is thinking if the loan is not paid off at least the property is used as collateral if the debt cannot be repaid. I got a feeling that is what he is thinking and why he feels doing this is easy. I disagree with that.

    0Reply
  • Bryan Devitt
    Contractor · Oxford, MA · Member since 2018 · 807 posts · 745 votes
    7y

    @Tony Marcelle I will put this as bluntly as possible, get a new partner. Get rid of them ASAP, tell them the truth, tell them a lie or just say you want to pause and come back to it later. I warn you with every ounce of my being, do not go into business with this person. Anyone who not only thinks this is a good idea, but wants to take a loan and wants to put your credit at risk while not even having a job is not a good partner for any business. It is true, you need to spend money and sometimes take risks but this isn't a risk, this is falling for a scam and being willing to take your partner with you because they think it will benefit them in the future. If they're willing to do that, imagine what else they're going to risk later.

    2Reply
  • Tony Marcelle
    OP
    Bessemer, AL · Member since 2014 · 581 posts · 32 votes
    7y
    Originally posted by @Bryan Devitt:

    @Tony Marcelle I will put this as bluntly as possible, get a new partner. Get rid of them ASAP, tell them the truth, tell them a lie or just say you want to pause and come back to it later. I warn you with every ounce of my being, do not go into business with this person. Anyone who not only thinks this is a good idea, but wants to take a loan and wants to put your credit at risk while not even having a job is not a good partner for any business. It is true, you need to spend money and sometimes take risks but this isn't a risk, this is falling for a scam and being willing to take your partner with you because they think it will benefit them in the future. If they're willing to do that, imagine what else they're going to risk later.

    I'm going with my gut on this one. This just doesn't feel right.

    2Reply
  • Anthony Wick
    Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
    7y

    @Tony Marcelle

    Why are you here? So we tell you no so you don’t feel bad? Sure. Go ahead and Co-sign. You have my permission.

    0Reply
  • Tony Marcelle
    OP
    Bessemer, AL · Member since 2014 · 581 posts · 32 votes
    7y
    Originally posted by @Anthony Wick:

    @Tony Marcelle

    Why are you here? So we tell you no so you don’t feel bad? Sure. Go ahead and Co-sign. You have my permission.

    No that's not it. I want to see if it makes sense to anyone else because it didn't sit well with me when I first heard his idea.

    0Reply
  • Jason D.
    Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
    7y

    @Tony Marcelle a few bad ideas here....

    1) Bad credit, no income, and taking on $17k more in debt. Bad idea

    2) Co-signing on that disaster. Bad idea

    3) Having this individual as a real estate partner. Bad idea

    3Reply
  • Dana WhickerPro Member
    Investor · Fernandina Beach, FL · Member since 2014 · 557 posts · 374 votes
    7y

    @Tony Marcelle Clearly you came onto the forms to have us confirm that your instinct is correct, this is a horrible idea.

    You got your confirmation.

    1Reply
  • Tony Marcelle
    OP
    Bessemer, AL · Member since 2014 · 581 posts · 32 votes
    7y
    Originally posted by @Jason D.:

    @Tony Marcelle a few bad ideas here....

    1) Bad credit, no income, and taking on $17k more in debt. Bad idea

    2) Co-signing on that disaster. Bad idea

    3) Having this individual as a real estate partner. Bad idea

     I am already looking for new partners now. I agree this whole thing stinks.

    1Reply
  • Tony Marcelle
    OP
    Bessemer, AL · Member since 2014 · 581 posts · 32 votes
    7y
    Originally posted by @Dana Whicker:

    @Tony Marcelle Clearly you came onto the forms to have us confirm that your instinct is correct, this is a horrible idea.

    You got your confirmation.

    That was not my intention, but I do appreciate the advice given.

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y

    he or she is just regurgitating what the guru sales pitch is..  need to take risk to make things happen.

    need to go ahead and run up a credit care  since you will get paid back first deal.

    what most don't realize when they do that is the first deal never happens..

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  • Peter Sanchez
    Real Estate Investor · Washington, DC · Member since 2014 · 236 posts · 328 votes
    7y

    For all the reasons above, this is HORRIBLE idea.  When you say yes to someone, you say yes to all their problems.  He has no job, no money, bad credit, and is about to get scammed by a real estate guru.  Those are his problems.  When you co-sign, now all those things are your problems too because you WILL have to pay it back when he can't. 

    They want you to co-sign a loan for him because lenders/banks, who loan money for a living, don't think he can pay it back, so they want you to pay it back for him. If professionals won't lend him money, why do you want to do it?  (co-signing is the same as lending him money because they will come after you and you will be trying to get him to pay you back, so if you don't want to lend it him, don't co-sign)

    0Reply
  • Megan Hirlehey
    Pittsburgh, PA · Member since 2016 · 140 posts · 119 votes
    7y

    I agree with everyone else on here. Run. Never partner with someone who is operating from a place of desperation. 

    How did you get connected with said partner anyway? Have you guys done business together in the past and he's just hit a rough patch? Or was he always a wreck and this is just the latest plan to solve all of his problems?

    0Reply
  • Anastasia Jordan
    Investor · Birmingham, AL · Member since 2016 · 446 posts · 305 votes
    7y

    Y'all could do A LOT in BESSEMER with $17,000. 10 grand could buy a SFH and y'all together could spend some weekends with a case of beer and rehab it yourself.

    1Reply
  • Tony Marcelle
    OP
    Bessemer, AL · Member since 2014 · 581 posts · 32 votes
    7y
    Originally posted by @Jay Hinrichs:

    he or she is just regurgitating what the guru sales pitch is..  need to take risk to make things happen.

    need to go ahead and run up a credit care  since you will get paid back first deal.

    what most don't realize when they do that is the first deal never happens..

    I warned him about what happens if the first deal don't come through. He was so sure and confident things will work out.

    0Reply
  • Frank Jiang
    Investor · San Diego, CA · Member since 2014 · 592 posts · 765 votes
    7y

    @Tony Marcelle

    You need to refine your own judgment abilities.  You should not be "leaning" towards no.  This is not only a no, but a resounding hell no.

    What exactly does this "partner" bring to the table anyway?  Sounds like you guys haven't even been through a deal together.  That would mean this person isn't even a partner, more like "a guy you know".

    0Reply
  • Tony Marcelle
    OP
    Bessemer, AL · Member since 2014 · 581 posts · 32 votes
    7y
    Originally posted by @Megan Hirlehey:

    I agree with everyone else on here. Run. Never partner with someone who is operating from a place of desperation. 

    How did you get connected with said partner anyway? Have you guys done business together in the past and he's just hit a rough patch? Or was he always a wreck and this is just the latest plan to solve all of his problems?

    He found me first a few years back on Connected Investors. I did not know who he was at first until I met him. Come to find out he was an old co-worker of mine at my current job. All his ideas always came down to one thing. His whole way of thinking is spending lots of money buying some guru's push button investing program where everything can be done with the push of a button. He doesn't want to put effort into actually doing the work. 

    0Reply
  • Megan Hirlehey
    Pittsburgh, PA · Member since 2016 · 140 posts · 119 votes
    7y
    Originally posted by @Tony Marcelle:
    Originally posted by @Megan Hirlehey:

    I agree with everyone else on here. Run. Never partner with someone who is operating from a place of desperation. 

    How did you get connected with said partner anyway? Have you guys done business together in the past and he's just hit a rough patch? Or was he always a wreck and this is just the latest plan to solve all of his problems?

    He found me first a few years back on Connected Investors. I did not know who he was at first until I met him. Come to find out he was an old co-worker of mine at my current job. All his ideas always came down to one thing. His whole way of thinking is spending lots of money buying some guru's push button investing program where everything can be done with the push of a button. He doesn't want to put effort into actually doing the work. 

    Yeah it sounds like you just need to start over with a new partner. If there was an "easy" button, your buddy wouldn't be unemployed and broke. Good luck!

    0Reply
  • Tony Marcelle
    OP
    Bessemer, AL · Member since 2014 · 581 posts · 32 votes
    7y
    Originally posted by @Anastasia Jordan:

    Y'all could do A LOT in BESSEMER with $17,000. 10 grand could buy a SFH and y'all together could spend some weekends with a case of beer and rehab it yourself.

    I can't afford to take that risk because I worry what if he cannot repay the loan if things don't go as planned.

    0Reply
  • Tony Marcelle
    OP
    Bessemer, AL · Member since 2014 · 581 posts · 32 votes
    7y
    Originally posted by @Megan Hirlehey:
    Originally posted by @Tony Marcelle:
    Originally posted by @Megan Hirlehey:

    I agree with everyone else on here. Run. Never partner with someone who is operating from a place of desperation. 

    How did you get connected with said partner anyway? Have you guys done business together in the past and he's just hit a rough patch? Or was he always a wreck and this is just the latest plan to solve all of his problems?

    He found me first a few years back on Connected Investors. I did not know who he was at first until I met him. Come to find out he was an old co-worker of mine at my current job. All his ideas always came down to one thing. His whole way of thinking is spending lots of money buying some guru's push button investing program where everything can be done with the push of a button. He doesn't want to put effort into actually doing the work. 

    Yeah it sounds like you just need to start over with a new partner. If there was an "easy" button, your buddy wouldn't be unemployed and broke. Good luck!

    I "may" have found a partner or two.

    0Reply
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