MD: as some of you have been following along this MD deal seemed like it would be cut and dry. man gets loan tenant moves out house is sold. the latest is that the tenant has started to move. really this time. and i may have mentioned we extended the closing date. the closing was missed yet again. REASON: the bank does not want to loan money on a 500 square foot home. the like a minimum of 700sf. normally fine, but, two reasons why this is wrong in this situation. first they waited till hours before closing to tell our seller this. and two, he is TEARING THE HOUSE DOWN and they know this. what the heck does it matter if the house is 500 or 500,000 square feet if the whole point of the loan was to buy property to teat down a house? we’re working the problem but i am growing tired of the constant idiotic funding problems. i do not hold this against the person trying to buy it. i just hope it will resolve before the next closing date.
DE. to recap the DE deal. i took on a partner and offered a even, and more than fair, 50/50 split of profits after all taxes. labor, materials, etc. when the house is sold. you provide cost of repairs and any personal labor you want, contract out the rest of the work, for 50%…sounds good right? chance to make a great return on your money. my downfall may be that i put faith in people and give them a chance without proof the are really a good person. first everything is fine. he had been doing some yard work and used his truck to haul away old junk. (reimbursed for gas, and etc) then after i made then things started to change.
we hired some porta Rican guys that lived close by to do some misc. work around, brush removal. some small paint job, grass cutting, etc. for a small under the table fee. well, my new business partner chose to become friends with these guys instead of keeping it professional. normally easy to be friends and work together for most people. my partner isn’t most people. it started out buying a case of beer after the first days work and slowly progressed to no work being done, him sitting around drinking with them and paying them more for less. we had a talk about the drinking at the property and it stoped….for a day.
i must add in here that i work 12 hour days 4 days a week and after leaving my day job come to check the house talk about what we’re doing next, check progress, etc. and on my days off i have been over there at 7 A,m. and stay for about 8 or more hours doing what i can.
now i just get off of work and head over to see the progress. my partner had been drinking again. he kept making some subtle remakes about all the time he’s putting in there and how i have not pulled my weight in the rehab. finally he says he expects to take a cut for all his time. nothing big, just a little cut for all his hard work. that’s fine i tell him. all though 50% of profits was what we agreed and it was his choice to do certain things instead f paying out to do them. i just tell him to give me a number so i can recalculate our agreement. don’t worry about that, it wont be to much considering what I’ve done. i just want to be compensated or my time. 50% is not enough compensation. it is clear he didn’t want to give me a price. i was about to leave because i hate dealing with people who’ve been drinking. i tell him if he expects more even i want a number right then. so he says…. $10,000
that’s right 10,000 on a deal i brought him into to try and help him make some cash. insane.
some words were said. i told him he just burned a bridge that could have made him allot of money in the long run. I left, went home finished the written version of our original verbal agreement and added in 2,000 for his time above and beyond the 50% we agreed. paragraphs to cover up any other loop holes for him to try and screw me and concluded by a paragraph stating if the above agreement is not to his liking he can leave the project and be reimbursed all funds spent with 7% interest. then he can bill my company for $10,000 or $10,000,000 for work done by him and since i would not be paying any amount other than what is fair he was free to sue me and i would be more than happy to plead my case f extortion and counter sue for the same amount.
he was given the agreement. waiting on his response. in retrospect i wish i would have just resold and walked away with around $10k. i swear i am never going to work with someone i knew or anyone for that matter until they prove to be trustworthy.
to add insult to injury the appraiser came out today and after he was done asked him for a rough estimate in the as is condition. he told me, 145-155. not nearly the 180,000 my partner was wishing for. i knew that was unlikely for it to go that high. on one hand I’m glad because he will not make what he wanted and wont be able to try and screw me out of more of my half. on the other hand, i would have made more by not attempting this partnership. that’s what i get for trying to help.
worse still. the bank has not yet cashed the check for the late payments. it could be they just haven’t gotten to it or they are refusing payment and may be trying to foreclose. everything else would seem like a joke if this is the case.. i would either have to come up with 20,000 out of pocket cash for a down payment of a new loan, which i don’t have 20,000 because d deal hasn’t closed yet. or the bank takes the house and we loose around 25,000 in money put into the property. the sellers well they are out of town for a week and i cant have them call to check…. if you religious, please prey for me.
so there it is, i hope this story will have a happy ending and not become a horror. i don’t want to rename the blog, “how i lost my mind in less than 120 days.”Share