King Pin to Real estate investor ? doable?

Question

Hey BP,I've been reading and taking as much away from BP as I can. One thing i learned on the podcast is to NEVER SHUT UP about your goals and try to provide value everywhere you go. So in my town I've been "putting everyone on" to all the financial pros of real estate. long story short I get a call from an old friend to meet p and talk about real estate. So basically he has decided to change his life and exchange occupational hazards of rivals and police for mortgages and renters. So basically he has a good amount of money and wants to make enough income via real estate to afford all of the pretty things he already has. He says his main goal is to be able to show proof of income going forward. he's clearly missing the big pictureHere I've been improving my credit for the last year and saving up my pennies and learning the craft to possibly first home buyer my way into the real estate game. Ive been exploring many financing options (as you can tell from my frequent posts). My first thought is to advise him to create an LLC or some type of fitting corporation and dump the money in there, invest and never look back to that old life. I have mixed feelings but I see great opportunity. Also thought this is one of the few ways you can make money even if you have to take an "unexpected vacation". I basically said I'll get back to him. What I really meant was I'll get back to you after I hear what BP has to say lol.As an aspiring investor what should I do with these circumstances? talk to me guys!

Account Closed · Answer

If he's got enough capital and no knowledge, perhaps you could be his adviser? Help him assemble a team, manage where his money is going and set up some deals! Figure out a percentage for yourself without having to use your own capital. I see it as an opportunity for the both of you provided, moving forward, you're not getting mixed up in anything that allowed him to acquire the funds in the first place. Looking forward to other's opinions because honestly I don't know what kind of speed bumps would come up when it's time to verify where the money came from before you purchase anything. Regardless, good luck!

JR T. · Answer

Not only do you risk your assets but helping him convert drug money into legit rent receipts is money laundering​. 20 year potential​ Federal sentence.

John Hickey · Answer

Donnell Durden criminals in every walk of life. I won't tell you what to do. I know plenty of guys I grew up with that had quick cash coming in over the years. Most of them I end up seeing in the papers. For some reason the guys I grew up with alway get big and get caught. I always did my own thing. I like to work with my own money. I'm pretty close to another real estate investor in the Bronx. When I was a kid he was a pretty bad guy and then one day he started buying houses. I think it was pretty quick that he realized he was onto something and completely changed his life. Now if you ask him about anything in the past he wants nothing to do with it. He talks about saving, investing taking care of properties. He did all that on his own, because he wanted to be legitimate. A few years ago one of my old friends was asking me how things were going. I told him great and he said he had a steady amount of cash coming in and would loan it to me a low rates. I said thanks but I have it under control. I recommended bigger pockets and offered some books but that was the last I heard from him. I'm sure that would have been ok. He is a really good friend of mine from when we were kids. But why take the chance. I put on a suit and goto 20 banks. They say no, I find a better deal. Sooner or later if I have a deal I will get the money and not have to regret I took shortcuts when I'm old and rich. Or even worse get mixed up in BS like some of the posts mention above. Look harder for deals and it's easier to get the money.

Richard Anderson · Answer

Hi Donnell, The advice I am about to offer is neither legal counsel or does it represent the opinion of my employer. You should talk to legal counsel about the situation. With that said, for my day job I am employed as an Anti-Money Laundering professional for a financial institution. Walk away from this situation. Wish your friend the best and walk away. There is no win for you. And the federal agencies who investigate and prosecute money laundering do not play.

Thomas S. · Answer

If I read your post clearly you should steer well clear of criminal money, at least until you personally are wealthy enough to insulate yourself from association. The feds will take everything you have they may believe was acquired with funds derived from criminal activities.

Thomas Anderson · Answer

ive seen this first before. it wont work. real estate is slow money. rent happens once a month. a quick flip can be 3-4 months. its not the quick money game. if you were in the middle of a flip and run low on funding, where would it come from? id hate to see someone with a bright future get caught up in a conspiracy or something like that. earn it on your own. then you owe noone anything.

Candace Postell · Answer

@Donnell Durden first off congrats for taking the steps 2 make a positive change. What I suggest is for you not to be directly involved in any of his transactions, but to maybe be an inspiration for him. I know, I know you probably feel like he is "the plug" because he has the cash & you have the know how, but think about it......You are building your foundation and are on your way to financial freedom, but first you have to make it there!!!! Dealing with your friend may cause an "unexpected vacation" for the both of you in the long run. One that may ruin everything that YOU have worked so hard to accomplish. So in saying all of that, you should advise him, but do not deal with him directly. Keep doing what you are doing & i can assure you that you'll make it 2 the TOP where you want 2 be. Nothing comes easy & patience is a virtue!!!Good luck

Josh Engelhart · Answer

Banks are going to attempt trace the money back to the source and wouldn't lend without any income. It can be hard enough to source business assets earned legally in a mortgage transaction without significant documentation. I figured people in those situations would just pay cash. I guess if you had enough cash and bought enough houses you would have a lot of rental income to file taxes on.Building credit is easy. You just pay everybody back on time.

Donnell Durden · Answer

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