My Brother-In-Law needs help (Real Estate Investment Fund)

[Butcho22]

Okay, I'll try and explain this as best I can. Let me know if anything needs clearing up.

My sister's husband is currently just starting his 3rd year in medical school in Vancouver,Canada. A resident he has met at the hospital owns/runs a Real Estate Investment Fund on the side. (His employees run it obv)

Basically he's presenting it as a no lose opportunity from what I have gathered. Guaranteeing no less than a 9.75% return, paid monthly.

He recommends investing no less than 100k. This money would be coming from my B-I-L's line of credit, which has 6% interest. So basically he's guaranteed 4.75% on his money. (possible? especially dealing with real estate???)

From what I've been told, the owner sounds like a stand up guy, but my brother-in-law is a newbie when it comes to this stuff, no doubt.

Now I'm not asking someone to tell me everything about this as I'm sure that takes time, and I'm sure you would need more information to do that.

Basically I'm hoping some of you can post advice for him, to cover his back through this process...anything that he may need to know or read to make sure he's fully informed before making a decision this big.

Any info or links to reading material on this subject would be much appreciated, as I'll eventually just show him this thread.

Again, If I wasn't clear about something, let me know and I'll ask him when he gets home later tonight.

Thank you in advance

[gull]

9.75% guaranteed return is impossible. This reeks of a scam (or at least not a full disclosure of the risks involved).

[jono]

seems too good to be true, huh?

[Butcho22]

The only way I can see this guy guaranteeing that return it to draw a contract stating that the money will come out of his pocket if necessary. (which seems highly unlikely)

[Jimbo232]

Whether or not this is a good fund it becomes an insanely difficult investment to justify if the money is coming from HELOC and he is fighting against a 6% vig.

He shouldn't even consider investing the money unless it is his own

[jaydub]

Yup, those no lose hedge funds with RE holdings have sure been doing well as of late.

J

[+EV]

[ QUOTE ]
9.75% guaranteed return is impossible. This reeks of a scam (or at least not a full disclosure of the risks involved).

[/ QUOTE ]

The current investment strategy that my partner and I are looking to sign people up for will yield 10% guaranteed. I don't want to share a lot of details but, based on investor input of 25K we can purchase a property that will yield a positive cash flow of 10% annually. The investment is returned in the form of a quarterly interest payment. The minimum investment amount is 25K and the minimum investment period is 5 years (although it could be less if we had a lot of investors lined up).

+EV

PS it is an investment based on a 30yr Principle + Interest loan so no funny business there. Very stable over the long haul.