Friends, family and investing

Discussion in 'Living Room' started by MTR, 5th Feb, 2020.

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  1. MTR

    MTR Material Girl Premium Member

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    Do you mix business/investing with the above

    Am in current interesting scenario with my bestie g/friend

    My partner is dead set against this

    thoughts
     
  2. Piston_Broke

    Piston_Broke Well-Known Member

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    If the investment means babysitting your friend into the world of investment I'd say think carefully and keep in mind there's a chance she won't be your bestie for much longer. Unless you take a loss.

    If your friend is a progressive socialist I'd say no chance. The usual line "it's me, not you" can be used.

    If your bestie has invested till now, why not?
    Are you making excuses for her?

    If your bestie get all worked up in rage playing monopoly, then absolutely not

    If you bestie already has IPs and a similar mindset towards investments I'd say it should be ok.
     
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  3. KateSydney

    KateSydney Well-Known Member

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    I wouldn't go further than giving information and encouragement.
     
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  4. MWI

    MWI Well-Known Member

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    We have a saying in our language but cannot translate directly into English as it rhymes and makes different sense but it could relate to this saying in English:
    Never mix business with pleasure....sort of?
    Basically meaning that sparrows have announced that you should not mix friendships with business ventures, best to do it alone?
    Advice, guidance by all means if someone with similar mindset and vales and investing.
     
  5. Lizzie

    Lizzie Well-Known Member

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    If they are on equal par with you, investing-wise - come in with equal finances - you have a very clear and documented exit plan for both of you at any time - if both of you are prepared to make a loss ... then go for it.

    There is a good reason why "old wives tales" become folk lore ... family (friends) and money don't mix
     
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  6. skater

    skater Capitalist -- www.skatepro.com.au

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    It's not something I'd ever entertain.
     
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  7. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    upload_2020-2-6_7-51-50.jpeg
     
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  8. spludgey

    spludgey Well-Known Member

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    I haven't previously. However, my parents recently offered me a loan (they're looking to invest their retirement funds somewhere), which would help me finance my first development and I'm seriously considering it.
    They'll be quite happy to just wait and get their interest, so I think it's extremely unlikely to create a rift.
     
  9. PandS

    PandS Well-Known Member

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    Wife family member asked us many times, the answer is always no, wife is a softy with family and I have to put my foot down and said no and made a big deal out of it and I point out countless examples.

    they move on to next sibling they got involved and **** happened, they don't talk to each other any more.

    Stick to the same rules with my kids, told them NEVER mix money with your siblings, if you need money or help with investment come to us and each of you go your separate way, NEVER mix money with family or with your friends.

    Doesn't matter how good it is, or you think how strong your bond is when money enter the picture,
    the rule is rewritten and everything will be shattered

    This wisdom was passed on to me from my parents and they witness countless falling out in their life time, I now passed on the same wisdom to my kids.
     
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  10. Piston_Broke

    Piston_Broke Well-Known Member

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    I think many confuse the difference between investing and helping out.
    Many relos/friends are really asking cause they want help, not an investment partner.
    They may not even know what to expect from an investment or an investment partner.
    This is the situation where you limit yourself to guidance and preparing them for what to expect.
    Even a small loan, as long as you never expect it to be repaid.

    This happen to me when a good friend was set to settle on a property and 1 week before the bank told him they need an extra 12k deposit or he can't get the loan. Begs belief and the broker he used....grrrr
    So I gave him a 12k loan an told him just pay back when he can. I knew he was good for it worked out well. If it never got paid back, oh well that's life journey.
    I've had a few similar occasions in both directions with family members.

    All the people i know with over 10mil in assets have had and have many investment partners along the way. They also had significant losses along the way too.
    Some of them offer partnerships even when they can go alone.
    Sure you have to pick them well but I don't subscribe to the "Everyone else is out to rip me off" paradigm.
    A good investment partner is a valuable asset.

    I don't buy the "equal" partner either. If you have 50mil in assets would a person with 5mil make a bad partner because of that? I don't think so.
     
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  11. Purple Patch

    Purple Patch Well-Known Member

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    What is worth more to you - A profit or a friendship?
     
  12. Ross Forrester

    Ross Forrester Well-Known Member Business Member

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    It can work. Lots of communication needed.
     
  13. hammer

    hammer Well-Known Member

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    Big no from me. Even just doing the basic stuff with my sister is hard and causes problems. Love her to bits but we're on two different planets when it comes to financial mindsets.

    Would never dream of doing any investing with my friends.
     
  14. Dan Donoghue

    Dan Donoghue Well-Known Member

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    The main problem I see with investing with someone else is that the control is removed from being on your to being split:

    What if your investor partner falls on tough times and needs to sell off but the market it bad and you don't want to?

    What if the investor partner wants to use the property as leverage for another one but you don't want to?

    What if something needs fixing or replacing, who makes the call on costs?

    There are many many things (mostly involving money) which could throw a spanner in the works but if you think it will work with your friend then that's up to you, we don't know the person so are less qualified to pass an opinion on this than you are :).
     
  15. TMNT

    TMNT Well-Known Member

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    are you going to go into partner ship? or just giving general advice? or pushing them to buy an IP?
     
  16. Brady

    Brady Well-Known Member

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    Just finished up JV with good friend last year. Worked well.
    He's a builder, made everything happen that side.
    I work in finance, made everything happen that side.
    I dealt with design, agents, staging etc
    He told me what would cost etc.

    Don't think would work with too many others.
    Our skillsets are complimentary
     
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  17. MTR

    MTR Material Girl Premium Member

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    Selling her one of my properties
     
  18. Dan Donoghue

    Dan Donoghue Well-Known Member

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    If it's just selling a property that you want to sell and she wants to buy then I don't really see an issue so long as they do their due diligence the same as they would when buying from a stranger.

    Last thing you want is an issue with the place down the track and they blame you for it.
     
  19. MTR

    MTR Material Girl Premium Member

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    thats my concern
    If things go pearshaped dont want it to come back and bite me
     
  20. Dan Donoghue

    Dan Donoghue Well-Known Member

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    Well it comes down to communication I think. So long as they do the same due diligence as they would buying from anyone else and you both agree that once the changeover happens you are not liable should anything be wrong then that should be good enough. If it does go pear shaped though (worst case scenario) and you lose this friendship, will it have been worth it or not? That really is what it comes down to.

    The fact that you have a "concern" would be enough to steer me away from this but only you know your friendship and how strong it is with this person.
     
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