DADDY LEFT ME MONEY DONT LET ME GET RIPEED OFF PLEASE

OP

Queen Creek, AZ · Member since 2015 · 18 posts · 6 votes

4y

Originally posted by @John Teachout:

Well, if you're concerned about getting ripped off, I would move forward with this "deal" very cautiously. I think at this stage, you don't have enough knowledge of the situation to make this type of investment. Don't assume your "family" are going to protect this interest.

Why did you give money to your uncle? Is this the same uncle that is proposing the deal?

Yeah I am definitely going to look at things carefully that's for sure. It is the same uncle. He has been putting a roof over my head for a the past few years while I drop in and out of college so I decided he deserves some rent money.

Account Closed

Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes

4y

Originally posted by @Mark Andrew Deidiker:

Hello I am from Arizona so I would appreciate someone from Arizona reach out to me so we can talk on the phone ideally. However I will explain my situation here in some detail. Not that I am entitled to anyone's advice, but it will be appreciated and will help me through my journey. When I was 19 I loved learning about this stuff so I had an account here and now that I am faced with this situation this was the first place I could think of to reach out for help.

Unfortunately my father passed away in June. I'll spare you most of the details, but I guess we're passing this off as 'cancer.' A few days after his death my grandma and uncle sat down with me and informed me that my father wanted me to have everything. His savings, house, and cars. I was truly shocked he was willing to trust me with this responsibility. His savings had around 35k most of which I didn't really end up seeing because I gave some away to my uncle and other expenses that came up and of course I had to buy a (humble) car and start my FBA business. Now the house is sold and I have a little over 150k to work with. Of course I am going to make sure I am spreading my eggs as much as I can so naturally real estate is going to come up. My uncle came to me with a proposal to do wholesaling deals. I was a bit confused because from what I understand you don't need any money or any business partners to do a wholesale deal. You make the deal then give the paper work to the title agency and flip it to the investor or apparently Zelle now? They claim to have someone who will lend up to 1mil as long as we have a 20% down payment, with me being the down payment. My uncle is a certified realtor as is the other guy who has the 'connections.' I am okay with doing a business partnership because it seems they would take a lot of work off of my shoulders and they already seem to have a long list of houses and are pretty much ready to get the ground rolling. They want to do a 1/3 cut. Do you think this is a fair cut? Should I be asking for more since I am risking my money? As you can probably tell I am in no way an expert in this field and before I go putting a down payment on anything I want to at least try to reach out and find more information.

Thanks,
Mark

If you don't want to get ripped off, don't post personal details online.

1. Put all of your money in a safe place for 6 months.

2. Take a month off to get used to your new reality.

3. If you decide to invest in real estate in AZ, join AZREIA.org ($20 per month, a good investment) and meet people who have successfully invested.

4. Get everything in writing. You can use Keyt Law to properly set up paperwork. I've worked with them a lot and they are very, very good.

5. If you invest with family, you still have to treat it as a business. If things "go south" on a transaction, will you still be able to enjoy Thanksgiving dinner with them? Don't make assumptions, you can't see the future.

That will get you started.

13 Reply

Joe S.Pro Member

Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes

4y

Originally posted by @Mark Andrew Deidiker:

Hello I am from Arizona so I would appreciate someone from Arizona reach out to me so we can talk on the phone ideally. However I will explain my situation here in some detail. Not that I am entitled to anyone's advice, but it will be appreciated and will help me through my journey. When I was 19 I loved learning about this stuff so I had an account here and now that I am faced with this situation this was the first place I could think of to reach out for help.

Unfortunately my father passed away in June. I'll spare you most of the details, but I guess we're passing this off as 'cancer.' A few days after his death my grandma and uncle sat down with me and informed me that my father wanted me to have everything. His savings, house, and cars. I was truly shocked he was willing to trust me with this responsibility. His savings had around 35k most of which I didn't really end up seeing because I gave some away to my uncle and other expenses that came up and of course I had to buy a (humble) car and start my FBA business. Now the house is sold and I have a little over 150k to work with. Of course I am going to make sure I am spreading my eggs as much as I can so naturally real estate is going to come up. My uncle came to me with a proposal to do wholesaling deals. I was a bit confused because from what I understand you don't need any money or any business partners to do a wholesale deal. You make the deal then give the paper work to the title agency and flip it to the investor or apparently Zelle now? They claim to have someone who will lend up to 1mil as long as we have a 20% down payment, with me being the down payment. My uncle is a certified realtor as is the other guy who has the 'connections.' I am okay with doing a business partnership because it seems they would take a lot of work off of my shoulders and they already seem to have a long list of houses and are pretty much ready to get the ground rolling. They want to do a 1/3 cut. Do you think this is a fair cut? Should I be asking for more since I am risking my money? As you can probably tell I am in no way an expert in this field and before I go putting a down payment on anything I want to at least try to reach out and find more information.

Thanks,
Mark

How long has your uncle been a realtor? Also the third partner in the story you didn’t describe him much. Without really knowing your uncle and the third partner it would be hard to give sound advice.

OP

Queen Creek, AZ · Member since 2015 · 18 posts · 6 votes

4y

I mean I really just wanted to know if what I was doing made sense to people who have been through the process a few times and how they might have split the money. Let me clarify: I don't think I am going to get outright robbed.

OP

Queen Creek, AZ · Member since 2015 · 18 posts · 6 votes

4y

Originally posted by @Joe S.:

Originally posted by @Mark Andrew Deidiker:

Hello I am from Arizona so I would appreciate someone from Arizona reach out to me so we can talk on the phone ideally. However I will explain my situation here in some detail. Not that I am entitled to anyone's advice, but it will be appreciated and will help me through my journey. When I was 19 I loved learning about this stuff so I had an account here and now that I am faced with this situation this was the first place I could think of to reach out for help.

Unfortunately my father passed away in June. I'll spare you most of the details, but I guess we're passing this off as 'cancer.' A few days after his death my grandma and uncle sat down with me and informed me that my father wanted me to have everything. His savings, house, and cars. I was truly shocked he was willing to trust me with this responsibility. His savings had around 35k most of which I didn't really end up seeing because I gave some away to my uncle and other expenses that came up and of course I had to buy a (humble) car and start my FBA business. Now the house is sold and I have a little over 150k to work with. Of course I am going to make sure I am spreading my eggs as much as I can so naturally real estate is going to come up. My uncle came to me with a proposal to do wholesaling deals. I was a bit confused because from what I understand you don't need any money or any business partners to do a wholesale deal. You make the deal then give the paper work to the title agency and flip it to the investor or apparently Zelle now? They claim to have someone who will lend up to 1mil as long as we have a 20% down payment, with me being the down payment. My uncle is a certified realtor as is the other guy who has the 'connections.' I am okay with doing a business partnership because it seems they would take a lot of work off of my shoulders and they already seem to have a long list of houses and are pretty much ready to get the ground rolling. They want to do a 1/3 cut. Do you think this is a fair cut? Should I be asking for more since I am risking my money? As you can probably tell I am in no way an expert in this field and before I go putting a down payment on anything I want to at least try to reach out and find more information.

Thanks,
Mark

How long has your uncle been a realtor? Also the third partner in the story you didn’t describe him much. Without really knowing your uncle and the third partner it would be hard to give sound advice.

What do you need to know? I can't give out his SS. Tall, dark, handsome.

Joe S.Pro Member

Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes

4y

Originally posted by @Mark Andrew Deidiker:

Originally posted by @Joe S.:

Originally posted by @Mark Andrew Deidiker:

Hello I am from Arizona so I would appreciate someone from Arizona reach out to me so we can talk on the phone ideally. However I will explain my situation here in some detail. Not that I am entitled to anyone's advice, but it will be appreciated and will help me through my journey. When I was 19 I loved learning about this stuff so I had an account here and now that I am faced with this situation this was the first place I could think of to reach out for help.

Unfortunately my father passed away in June. I'll spare you most of the details, but I guess we're passing this off as 'cancer.' A few days after his death my grandma and uncle sat down with me and informed me that my father wanted me to have everything. His savings, house, and cars. I was truly shocked he was willing to trust me with this responsibility. His savings had around 35k most of which I didn't really end up seeing because I gave some away to my uncle and other expenses that came up and of course I had to buy a (humble) car and start my FBA business. Now the house is sold and I have a little over 150k to work with. Of course I am going to make sure I am spreading my eggs as much as I can so naturally real estate is going to come up. My uncle came to me with a proposal to do wholesaling deals. I was a bit confused because from what I understand you don't need any money or any business partners to do a wholesale deal. You make the deal then give the paper work to the title agency and flip it to the investor or apparently Zelle now? They claim to have someone who will lend up to 1mil as long as we have a 20% down payment, with me being the down payment. My uncle is a certified realtor as is the other guy who has the 'connections.' I am okay with doing a business partnership because it seems they would take a lot of work off of my shoulders and they already seem to have a long list of houses and are pretty much ready to get the ground rolling. They want to do a 1/3 cut. Do you think this is a fair cut? Should I be asking for more since I am risking my money? As you can probably tell I am in no way an expert in this field and before I go putting a down payment on anything I want to at least try to reach out and find more information.

Thanks,
Mark

How long has your uncle been a realtor? Also the third partner in the story you didn’t describe him much. Without really knowing your uncle and the third partner it would be hard to give sound advice.

What do you need to know? I can't give out his SS. Tall, dark, handsome.

That’s the point.A bunch of strangers on the Internet does not know your uncle or his friend. To say someone like your uncle is out to rip you off is not likely. With that being said people that don’t know what they’re doing can burn through 150 K in short order.

Podcast Guest on Show #222

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

4y

lets look at risk factors.

1. wholesaling takes a pretty heavy marketing budget to make any real money unless your just going to use your time to drive for dollars etc.. so risk is dropping 10 to 30k on marketing and not making enough to cover your overhead and you have a net loss.. this is the way it goes for the vast majority who try wholesaling.. those that make it are full time have a lot of marketing budget and a lot of sales skills and knowledge.

2. flipping.. risk is your flip flopped.. I would NO way no how borrow 1 million in hard money that is a huge risk.
you can try one deal see how it goes you have years.. Plus its not 20% down you need money for payments you need at least 100k in reserves for this type of loan your payments are going to be 10k a month plus utls etc etc. YOu will need to advance draw money HML will almost always only let you draw on materials in place.. 90% of the rehab contractors out there wont wait for HML draws to be processed so you have to front it and get back filled.

3. Rentals this you do on your own. and is the easiest to understand and execute. Although you may have lack of credit or income issues getting a loan.BOTTOM LINE your a perfect HOUSE HACK first time buyer.. Buy a duplex or 4 plex with FHA loan minimum down save your cash rent it out live in a unit basically for free.. Go to the meetings as some suggest or even better take a pre RE licnense course to get a better understanding of the vocabulary of the industry and the laws. even if you dont sit for the test you will learn a lot.. and getting your license to even be on a team and work part time would be a benefit as well at your age..

I got my license at 18 and my brokers at 20 so I have been an independent broker in 3 states for going on 47 years now.. so thats an option.. takes time to build a rolodex ( thats old school for client list) but once you do RE becomes almost all referral based .
So there are some thoughts.. personally last thing I would do is put up your nest egg .. were its your money and someone elses great idea. even if it is family.. or if your compelled to do it.. just dip your toe.

But again this is a perfect time for you to buy your own home to live in and set your foundation. I bought my first home at 19 after one year in the business and it set the course of the rest of my life.

JLH Capital Partners51 Review

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7 Reply

Chad McMahan

Residential Real Estate Broker · Sedona, AZ · Member since 2017 · 751 posts · 504 votes

4y

Originally posted by @Account Closed:

Originally posted by @Mark Andrew Deidiker:

Hello I am from Arizona so I would appreciate someone from Arizona reach out to me so we can talk on the phone ideally. However I will explain my situation here in some detail. Not that I am entitled to anyone's advice, but it will be appreciated and will help me through my journey. When I was 19 I loved learning about this stuff so I had an account here and now that I am faced with this situation this was the first place I could think of to reach out for help.

Unfortunately my father passed away in June. I'll spare you most of the details, but I guess we're passing this off as 'cancer.' A few days after his death my grandma and uncle sat down with me and informed me that my father wanted me to have everything. His savings, house, and cars. I was truly shocked he was willing to trust me with this responsibility. His savings had around 35k most of which I didn't really end up seeing because I gave some away to my uncle and other expenses that came up and of course I had to buy a (humble) car and start my FBA business. Now the house is sold and I have a little over 150k to work with. Of course I am going to make sure I am spreading my eggs as much as I can so naturally real estate is going to come up. My uncle came to me with a proposal to do wholesaling deals. I was a bit confused because from what I understand you don't need any money or any business partners to do a wholesale deal. You make the deal then give the paper work to the title agency and flip it to the investor or apparently Zelle now? They claim to have someone who will lend up to 1mil as long as we have a 20% down payment, with me being the down payment. My uncle is a certified realtor as is the other guy who has the 'connections.' I am okay with doing a business partnership because it seems they would take a lot of work off of my shoulders and they already seem to have a long list of houses and are pretty much ready to get the ground rolling. They want to do a 1/3 cut. Do you think this is a fair cut? Should I be asking for more since I am risking my money? As you can probably tell I am in no way an expert in this field and before I go putting a down payment on anything I want to at least try to reach out and find more information.

Thanks,
Mark

If you don't want to get ripped off, don't post personal details online.

1. Put all of your money in a safe place for 6 months.

2. Take a month off to get used to your new reality.

3. If you decide to invest in real estate in AZ, join AZREIA.org ($20 per month, a good investment) and meet people who have successfully invested.

4. Get everything in writing. You can use Keyt Law to properly set up paperwork. I've worked with them a lot and they are very, very good.

5. If you invest with family, you still have to treat it as a business. If things "go south" on a transaction, will you still be able to enjoy Thanksgiving dinner with them? Don't make assumptions, you can't see the future.

That will get you started.

I'm sorry about your dad. That's awful.

As far as advice:

I completely agree with Mike's advice. I would also give additional reinforcement to his first comment, "don't post personal details online".

Don't do that, ever.

Also, I know $150k feels like a lot, now. But later, it will be gone and you'll realize how little $150k is actually "worth" in today's economy. Keep $20k that you do NOT spend. Invest the rest in real estate- DO NOT USE FAMILY/FRIENDS. USE THE BEST!!!!! And keep working like you don't have the money- otherwise, you'll spend $150k and receive no long term benefit.

RE my comment on fam/friends: Using family/friends for your business partners usually leads to a worse outcome than you can get if you simply utilize the top people- unless your family member or friend just happens to be the top agent or lender, etc, in your area- which is highly unlikely.

Good luck and keep your cards close to your chest.

4 Reply

James French

Member since 2021 · 50 posts · 27 votes

4y

Wow you got some good advice! Thanks to all the BP people!!!

OP

Queen Creek, AZ · Member since 2015 · 18 posts · 6 votes

4y

Originally posted by @Jay Hinrichs:

lets look at risk factors.

1. wholesaling takes a pretty heavy marketing budget to make any real money unless your just going to use your time to drive for dollars etc.. so risk is dropping 10 to 30k on marketing and not making enough to cover your overhead and you have a net loss.. this is the way it goes for the vast majority who try wholesaling.. those that make it are full time have a lot of marketing budget and a lot of sales skills and knowledge.

2. flipping.. risk is your flip flopped.. I would NO way no how borrow 1 million in hard money that is a huge risk.
you can try one deal see how it goes you have years.. Plus its not 20% down you need money for payments you need at least 100k in reserves for this type of loan your payments are going to be 10k a month plus utls etc etc. YOu will need to advance draw money HML will almost always only let you draw on materials in place.. 90% of the rehab contractors out there wont wait for HML draws to be processed so you have to front it and get back filled.

3. Rentals this you do on your own. and is the easiest to understand and execute. Although you may have lack of credit or income issues getting a loan.BOTTOM LINE your a perfect HOUSE HACK first time buyer.. Buy a duplex or 4 plex with FHA loan minimum down save your cash rent it out live in a unit basically for free.. Go to the meetings as some suggest or even better take a pre RE licnense course to get a better understanding of the vocabulary of the industry and the laws. even if you dont sit for the test you will learn a lot.. and getting your license to even be on a team and work part time would be a benefit as well at your age..

I got my license at 18 and my brokers at 20 so I have been an independent broker in 3 states for going on 47 years now.. so thats an option.. takes time to build a rolodex ( thats old school for client list) but once you do RE becomes almost all referral based .
So there are some thoughts.. personally last thing I would do is put up your nest egg .. were its your money and someone elses great idea. even if it is family.. or if your compelled to do it.. just dip your toe.

But again this is a perfect time for you to buy your own home to live in and set your foundation. I bought my first home at 19 after one year in the business and it set the course of the rest of my life.

The boss has arrived. Thank you for the insight. It really helps to put things into perspective. I have a lot of learning to do before I make any decisions.

Bruce WoodruffPro Member

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

4y

I would do nothing for a while. Properties aren't going anywhere. Park the money in a CD for 6 or 12 months. Get used to life without your Dad....

As for doing business with family, I agree that it is not the best idea. They may be trying to help, but they are most certainly looking to gain for themselves at the same time. It will probably get messy at some point. You don't need them to do a lot of Real Estate deals anyway...

What you need most is education.....on the Real Estate side and IMO on the construction side, so you can do a lot of your own work and get that sweat equity going on your side...... go learn, learn, learn.....

2 Reply

Kevin Romines

Lender · Winlock, WA · Member since 2013 · 1k+ posts · 1k+ votes

4y

There is lots of solid advice here. Lean on what has been said and those that have been there done that. @Jay Hinrichs has done many kinds of investments small and large over the years and always give solid advice.

I wouldn't spend a dime until you are educated enough that you know you can execute the path you intend to go down. As far as getting in deals with partners, be very wary. Even in the best of situations, it will start showing cracks soon or at some point, you are dealing with personalities and each persons own financial situation, which you wont know all their details. Proceed with caution. Remember, any partnership is a marriage, it come with all partners baggage. Are you truly prepared to be married to that partner, from an investors stand point?

I think one of the 1st things you need to decide is what path interest you the most, wholesaling, fix n flip, BRRRR, buy and hold, land development. Once you have decided the path that interest you the most, then proceed to get as much FREE education as possible. Joining other real estate investment groups is a must. If you regularly attend, you will learn so much and also meet people that have actually done deals in your area. Again, be very cautious about partnering up regardless the success that a person may say they are having.

Once you have more education on your pathway and the various steps to properly execute the plan, at that point you may be a bit more qualified to judge someone else success or failures and then decide if they would be a good candidate to partner up with.

I don't mean to put the brakes on the partnership idea, but this is the one and only nest egg you have. You have to protect nest eggs from all comers. get the education you will need 1st, and then deploy your nest egg as sparingly as possible. Also, set aside $25,000 that you will never spend. This is your emergency money, its what bails you out when you have virtually nothing else left.

You can make profits in real estate, but as easy as it is to make profits, it is also just as easy to make mistakes and lose money. Get the education 1st!!!

Oh, and because you will always need a place to live, go get approved for an FHA loan to buy a 2-4 unit property. The rents from the other units can allow you to live there for free. Its also a great way to start your real estate investment career.

I hope this helps?

3 Reply

Mary M.

Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes

4y

First, dont post online that you inherited money. Second trust NO ONE. Third put the money in the bank and dont touch it for at least 6 months to a year while you figure stuff out.

There are MANY sharks on BP and you just made yourself a target. I would delete this post or delete your profile and dont tell anyone about the money!

3 Reply

Sunil Kurian

Investor · Bucks County, PA · Member since 2020 · 41 posts · 52 votes

4y

@Mark Andrew Deidiker

Lots of good advice already given here.

If it were me, and I did not already feel comfortable with a particular vehicle for investment....I'd park the money in a CD, bond, or index fund (depending on risk tolerance). I'd follow that up by giving myself a year to educate myself, binge listen to podcasts, and make my own non familial business connections without changing my lifestyle or income source by one penny. I'd then figure out the best investment path for myself and (without touching the $150k) invest my own money at whatever scale I was able. Only once after I had seen a return on my own money would I even touch the $150k. Treat it like a large emergency fund or a windfall later on and it will be a blessing to you at the right time.

A lot of folks on these forums have scratched and clawed there way to success without even having had a fraction of that kind of financial head start. If you can prove to yourself that you can multiply your own money at a smaller scale, you will honor your father's by injecting his money into a surer thing rather than risking speculation from the jump.

4 Reply

Bruce WoodruffPro Member

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

4y

Originally posted by @Sunil Kurian:

@Mark Andrew Deidiker

Lots of good advice already given here.

If it were me, and I did not already feel comfortable with a particular vehicle for investment....I'd park the money in a CD, bond, or index fund (depending on risk tolerance). I'd follow that up by giving myself a year to educate myself, binge listen to podcasts, and make my own non familial business connections without changing my lifestyle or income source by one penny. I'd then figure out the best investment path for myself and (without touching the $150k) invest my own money at whatever scale I was able. Only once after I had seen a return on my own money would I even touch the $150k. Treat it like a large emergency fund or a windfall later on and it will be a blessing to you at the right time.

A lot of folks on these forums have scratched and clawed there way to success without even having had a fraction of that kind of financial head start. If you can prove to yourself that you can multiply your own money at a smaller scale, you will honor your father's by injecting his money into a surer thing rather than risking speculation from the jump.

Awesome advice!

Zachary Bellinghausen

Member since 2017 · 143 posts · 76 votes

4y

I would not rush into anything. Lots of smooth talkers and swindlers out there, be very careful. Easy come, easy go. I have made some good friends that I trust and we ended up partnering on an mobile home park we converted into an RV campground. I somewhat piggybacked on their deal. It was a symbiotic relationship that is turning out to be a gold mine. Maybe make some friends in the Real Estate field and see if you can do the same. A partner of mine meets with owners all the time to discuss selling midsize multifamily deals that are not listed on the MLS. You may be interested in a passive investment in Real Estate. I would definitely learn more and grasp the fundamentals before investing a penny. Feel free to reach out if you'd like.

OP

Queen Creek, AZ · Member since 2015 · 18 posts · 6 votes

4y

Wow I am very grateful and impressed with all the advice I have gotten. I am definitely going to be taking a lot of time to rest my mind and educate myself so I make the best decisions that ultimately meet my goals. I am disgusted by how I am in this predicament and I should be becoming successful without his money and buying him a truck. I don't want a "small loan of a million dollars." No that's not my dream. It was always my dads dream to win the lottery. Not mine. So nasty this world we live in. He worked his *** off every day. SO hard every day just to suffer for 2 years, drop to 70lbs and die before he can retire or pay his house off that he worked so hard for us to keep. I really really really hope that there isn't some sort of dark money and the cancer association involved with any of this stuff... anyways getting way off topic. Thanks again guys. Really helped and I am sure it will help others.

Mick Hofmann

Real Estate Agent · Scottsdale, AZ · Member since 2018 · 46 posts · 22 votes

4y

@Mark Andrew Deidiker the best investment you can make is an investment in yourself. There are a million ways to make money. Invest in yourself by reading books, taking courses, attended seminars and never stop learning. Sorry to hear about your dad. Best of luck.