Steve D. Valentine asks a family friend for a $110,000 loan at 10% interest to buy a $160,000 house. He plans to repair it, rent it out, and refinance within six months to repay the loan. He frames it as a formal business deal, not a family favor, offering above-market terms because he has no credit or cash.
would you loan me $110,000 at 10% interest to buy this house? I'm gonna need it for 6 months while I make the repairs, get a tenant in, and then I'll refinance it and get your money back. And he thought about it and he drove by the house and I explained to him the values, what I was buying it for. I borrowed $110,000, the house was worth $160,000. He was a family friend. So I had trust built and rapport and we had a personal relationship, but I wasn't asking him to borrow money in the form that most family and friends do. Like, hey, can I borrow $10,000 'cause I'm gonna buy a boat or do something like that. This was a business proposal. I'm trying to accomplish this and I'm willing to pay above market because I don't have the credit or the cash to do it. Does that, is that a win-win for us?
It’s Not What Your House Is Worth; It’s What It Can Do for You (Pause, Identify, Respond)
