‘He tells me this is a great deal for me, as I am protected because of the equity in the house, and that I’m earning 5% on my money.’
Dear Quentin, I would like your advice on giving a hard-money loan to the man I’ve been dating for five years. He pressed me on this issue three years ago. I didn’t do the loan then, and it was a serious issue between us. The term of the loan that he secured with a third party was three years, which is now expiring. He wants and expects me to loan him $165,000 now.
Also, he has a pending bankruptcy , and he works for himself as a website builder. We live in Nevada. He tells me this is a great deal for me, as I am protected because of the equity in the house, and that I’m earning 5% on my money. I would appreciate your thoughts on this issue. Time is critical, because he needs the deal done the first of May.
3. You have a relationship with this man, and asking you to loan him money — with or without his real estate as collateral — mixes finance and romance. The two rarely, if ever, make suitable bedfellows. It creates an unhealthy, codependent dynamic.1. You are correct in your concerns about the loan itself. At the age of 74, you are wise not to get mixed up in a financial commitment over a five-year period. This should be a time in your life when you are enjoying life without financial worries.
Finally, time is critical — for him, not for you. Before any loan, an individual or financial institution should establish their own timeline to do due diligence. Timeshare and second-hand car salespeople have been known to wear down potential investors under pressure. Real friends do not.