I want to share this with my friends at mrlandlord community.

Yesterday, wife decided to fund her long time friend's husband's failing business after much discuss at Starbucks. I support her 100%. $200K with no collateral, no interest. (That's most what we have in the bank)

This morning, I am reading the post on my foyer hallway wall "Faith is being sure of what you hope for and certain of what you do not see". I am contemplating on faith in line with what we are going through.

We sold and closed 2 properties couple weeks ago. Paid off the HELOCs that we used to fund the purchase of our downsized primary home 2 months ago. Planed to use the $200K to pay down our mortgage debts on rentals to achieve debt-free FREEDOM faster..

I got my pink slip right after Thanksgiving after 20 years with the company and decided not to look for W2 job and go full time landlording. this month will be my last month, while I have 2 in private schools and 1 entering college this year.

Throughout marriage struggle during last year, with the help from a devoted christian friend, it came to term that God has a calling for me to pursue Him further, while wife doesn't have that.. So, our soon to be 24 year marriage may end in couple years and go separate ways as friends.. We both came to the same conclusion..

The friend's husband is a college dropout but brilliant business man.. built a high end lighting business to the tune of annual revenue of 12 million dollars(high margin business). Due to the rapid expansion and some mismanagement, he is facing immediate bankruptcy. (He learned how brutal commercial real estate world is. The realtor who was supposed to help sell the building screw him up, $1 million lost during the transaction that exacerbate the business). He has cultivated international markets for couple years and is at the verge of fruition. I don't believe he is a christian. But he believes his business and has strong faith in winning even yesterday. (Most people would have killed themselves after what he went through last year and half)

After much discussion, dinner meeting with their family, wife decided to take a chance, have faith in him. The friend has 4 kids like us, one is entering college and youngest is in elementary school. Maybe it is looked upon as foolish, but I kept reminding wife, you can't bring money with you to heaven and whether that $200K can save him and his family, its in God's hand. (I would be lying if I didn't have second thought)

If you read the other post, we just had a car accident and trying to reach out to the dealer to figure out what our options are. May lose $10K or more if the dealer or Honda doesn't own to it.

I am working on renovating the new house. Almost completed forced hot water baseboard (3 zones), converted from steam system. Got a quote of $15K to rewire the entire house (knob and tube). I decided to do them all by myself, my 11 year old daughter is eager to help. :) And I still secretly get the joy of a bargain when I pump gas at a gas station whose price is 10 cents cheaper..

2020 is here.. I am turning big five o. With all the changes we are going through, I haven't booked my trip to the mrlandlord convention. Future can be exciting and can be scary due to uncertainty.. I want to say happy new year and have faith in God that whatever turns out is to His glory!

It sounds like a bad time to give away that money, but it also sounds like you and your wife decided to do so together - even though you keep saying "she" did.

As a Christian myself, I know that the Bible does NOT says specifically what individual person must go full-time into the ministry.

It DOES say if you make a commitment of marriage, it is until one of you dies. Reconsider (throw out) the advice from that friend, and your "feelings" about ending your marriage. Figure out how to keep your "promise" and save it.

Emotions vary - the Word of God does not waver.

And that quote about being sure of what you hope for is referencing salvation, not a business decision.

For what it's worth, I'll pray for you - and hope things turn around for you.

Sounds like the Train (of life) is coming down the tracks.

I am speechless

sounds like the decision has been made but you are still trying to sell yourself.

There would have to be an upside for this DEAL but you identify none

Eliot, even though I only know you from your postings here & our recent meet up dinner, I think that you are more than capable of meeting & more importantly beating this challenge. Best of luck with your newest endeavor.

dollars and cents and business wise, this makes absolutely no sense.

Me personally, I've got no idea how religion or faith encompasses your $200,000 cushion - which you say is basically all of it.

If you want to help, why doesn't he go bankrupt and use the $200,000 to start a new business - where you've got ownership and collateral?

Also, I'd make interest a part of it - why not? if he succeeds, he should be happy to pay. If he fails, won't matter either way.

you say there was mismanagement - what has he done to not mismanage your $200,000? Losing $1 million on one deal shows some poor judgment - the realtor can't mess up without the property owner's input.

Does his wife work? Is he willing to work a second job? Have they sold their home and downsized like you have? Have they begged, borrowed and stolen from both their families so that someone else is also sharing their vision and your risk? In other words, what are they sacrificing? What do they have to lose?

Mid-life crisis.

Marriages have standard ‘snag points’ where couple think, ‘ is this really it?’ Most of us have heard about the ‘seven-year-itch’, but there is another stressor point at 13 years, 18 years, and 25 years. A couple might not hit these exactly, but they roughly coincide with changes in life, maturity of kids and so forth. One of the things that helped my husband and I was when he researched trouble in marriage and came across those points, We hit them perfectly. Just knowing those are difficult times helped us make it through, though at our twenty-fifth wedding celebration, I was grumbling (to him) that his face was going to be on a milk carton, and my picture was gonna be in the post office. ( where’s my shovel?!?, lol!)

Getting through the rough patches ( takes lots of work) was BEST thing we could have done, in my never humble opinion. It’s only 9 AM here, and already today we’ve shared dozens of little laughs, small intimate moments. I couldn’t imagine the pain that must be there to want to walk away from a long-time marriage.

Your post is not asking for advise, so I will give none. I can not say that I think your plan was at all wise or even related to the practice of Christianity as I understand it.

Elliot,

You've already decided and you are not asking for advise.

However, there's an old saying: "you lend money to a friend..." you know the rest of the saying.

No matter what happens, don't look back.

I'm still struggling to understand your motive.

It's your decision and your money.

When I was in my youth I was in the Jewelry Business making lots of money. I purchased 5 SFR from 18 to 20 years of age. I also helped many of my "friends" with their financial needs and business ventures.

Then when the Jewelry industry took a turn for the worst, my clients were late on paying their invoices. So I went to the seven (7) friends whom I let money to and asked them to help pay my "rent" on my business space. My rent was only $695 a month and my friends stilled owned me tens of thousands of dollars. Do you know how many of these friends help me out by at least re-paying me a few bucks? ZERO! I was a sucker. In good faith they wanted to pay me back but instead they needed a new car, pay for a wedding, move to a larger apartment, etc.

If someone can't get themselves out of financial trouble, by helping them, you are only delaying their realization they will fail soon enough.

Elliot, you didn't ask for advice but you DID post, so you at least expect comments.

I think you owe your children more than you owe a random friend of your (soon-to-be-ex?) wife.

How will they feel when they learn you handed over $200k to someone else without considering what THEY may need?

Elliot.

Speaking as someone who has been there, I think you're about to get reamed. Don't you find it coincidental that just as you get a big payday, you suddenly, within 2 weeks, get a request for all the money? No collateral????

Getting a divorce? All coming together at the same time?? Relying on faith???

This looks to me like a good way for you to wind up living in the back of your car, if you get to keep it, or at the homeless shelter.

Also, what kind of a business doing 12 million a year suddenly needs 200K, exactly the amount you have (again, how coincidental) with no collateral? It seems unbelievable. Like the moon's coming out of orbit unbelievable level.

You should be extra careful.

I think you're in the process of getting cleaned out.

I just hope this isn't a scheme cooked up by your soon-to-be ex-wife and best friend to run away together with your money. What are the odds that the amount he needs just happens to be the amount of cash you have on hand?

Helping a friend is one thing, helping a friend's business is quite another. The friend can bankrupt his business and get a job working for someone else and be quite fine feeding his family.

I hate using religion to justify poor decisions. Maybe that little voice telling you it's a bad decision is actually God speaking to you?

Either way, it's done. Now you have no emergency funds and now you're in danger if more bad things happen to you. What happens when your friend loses your first $200k and wants more? Can't imagine $200k is enough to sustain a multi-million dollar company. Maybe that figure wasn't based on how much he needed but how much you have available?

I have a real problem even thinking about your planning to do this. From what you have written, it appears you are willing to risk (probably sacrifice) almost everything your family has for a person with whom you have only a tenuous relationship (husband of a friend of your wife). I might be able to understand this more if the person was a very close and trustworthy longtime friend who had a very good financial record or a very close and valued relative - and with the person contributing some of the collateral and your receiving some financial return such as interest or a share in the business.

I've thought about this some more ... still completely baffled by it.

why not go bankrupt? I forget the chapter for a business to reorganize - stores do it all the time. For people, it's Chapter 13. that will give him time to regroup and figure it out ... or not.

Hello Elliot, my friend. You certainly have a lot on your plate right now. While I am certainly not crazy about a no interest, no collateral loan I'm sure you wouldn't have done it unless you knew you would be just fine if you don't get any of it back.

What is perhaps more concerning is the collapse of your marriage. Maybe try marriage counseling or seek a Christian marriage counselor to help you determine if you can save it. It is worth trying to save!

Sonething is amis.... you wrote: built a high end lighting business to the tune of annual revenue of 12 million dollars.

You reference your call to Ministry so I have to ask. When the bible talks about faith, what is it referring to? In other words Faith in what? It seems to me that you are putting your faith in man (as others have pointed out), I don't think that is what we are called to put our faith in. I challenge you to do some reading on faith. Start by doing a word search for all the references to faith particularly the new testament, then find a good Pastor to compare notes with and get a fuller understanding of what Biblical faith is and is not.

Next, I challenge you to study up on the Biblical principles of marriage as well. There are specific scriptures that speak to your situation of a believer yoked to a non believer. Don't get hung up on what the wife's role is in marriage, that's not your job. Look for your role as a husband. I will share that a deep study and effort to live out Ephesians 5 saved my marriage years ago.

Finally, spend some time studying up on what it says about money. Did you know that there are more references to managing money than nearly any other topic. There are some really direct references to your situation.

The hard part is putting aside our personal desires and following the life instruction manual we have been given, having trust in Him who leads us. Otherwise, we are working outside of the plan he has laid out for us.

I’m rethinking this, too.

DON”T DO IT ELLIOT!

Turning your life savings over to a virtual stranger, who has proven he is incompetent to run his business, is financial suicide. Your wandering post and sad reflections on your marriage make me question your mental competence. You need help, and perhaps a psychiatric examination. If you haven’t turned the money over yet, don’t do it. If your wife leaves you over this, then your marriage was not meant to be. As others have said, your first duty is to your family, especially your kids, not some shady businessman.

Elliot, I was going to step back from posting for awhile, but you have been an online friend here for many years so I wanted to add my thoughts for what they are worth.

I'm sure you and your wife have thought all these issues through, and while I don't share your faith in diety, I support your choice to persue your faith at a deeper level. I'm certainly not qualified to offer marriage counseling, but I would encourage you to explore that as a couple, even as a family. Perhaps you can find ways to revitalize your relationship as it evolves and you grow as individuals.

My concern would be loaning that kind of money without collateral or an ownership position or any real investigation into the other parties. The tv is full of stories like this where folks lose everything. While it is noble to help a friend, using your families legacy for a risky loan/gift doesn't seem prudent to me. If no hard money lender will touch this there may be a reason.

I'm not clear, did he have a bad RE deal that lost a million bucks and took the company down? What exactly is the money for? Tangible production materials, with pre-sold contracts? Debt payments? What?

Where will your family be if he loses the money? Have you done actual studies regarding the viability of the business? Especially overseas revenue. I forsee this event, if it goes bad, leading to stress on your relationship. I think I would want a lot more information, AND control.

What does his comptroller say? Are there other stakeholders? What is your wife's background that qualifies her to spend this community money. What do the company tax returns, sales contracts, etc. say? I would encourage much more discussion, and NOT at Starbucks. In a lawyers or CPA's office, with charts and figures, not napkin financing.

BTW - We saw a really sweet deal yesterday in Las Vegas, a bright red 2007 Corvette with 14,000 total miles, garaged since new, for only $21,000. My spouse and I are seriously contemplating having a mid-life crisis... ;)

Elliot...my better angels told me to not respond to this post....perhaps they are right????

This sounds horrible.

(loaning all your money to the husband of a friend of a spouse with no interest).

First of all, let me say.. thanks for all the responses and cares that you guys poured out. I haven't written the check or wired the money yet. (My online bank wouldn't allow me to do that and it was weekend so my bank was closed )

When I typed faith, it is not the faith about the owner turns his business around or get the money back if we loan to them. It is Christian faith in general. With all the uncertainty in the near future, I am relying on faith to carry me forward. The christian friend helped transformed me to a much better version of myself in last 6 months. (I don't cuss at tenants or my handyman anymore for a starter)

Through thick and thin, wife's friend had never given up on her even though wife would ignore her messages for days. She would try very hard to convince wife that I am a good guy, when wife had doubts about me. It is hard to see someone go down when you know that their hearts (at least hers) are like gold. No, they did not know that we have 200K in bank, we have some more.. but that's not the point, like all we say, we only loan the money we can afford to lose.

I used to dogmatically believe in marriage and divorce is not an option(Mark 10). I don't want to turn this into a biblical discussion, let's just say, as crazy as it sounds, God never asked us to stick with a dying marriage(Mark 10:9 "what God has joined together, let no one separate", what God has joined, not man), our marriage should serve purpose to glorify Him.

As some of you truly concerned about the $200K, I am more concerned about my involvement in supplying the money. I had a meeting with my Christian friend today. She was business savvy and I introduced her to the business owner yesterday, hoping to get some investors to inject $2mil to turn the business around. Being business savvy, she advised against loaning the money due to multiple red flags.. I wish life is not that complicated.. I could barely understand all the consequences with bankruptcy and international business issues.

So, I no longer support wife's decision and advised her such. She couldn't abandon her friend in good conscious. I am good at fixing stuff, but bad at expressing myself in words. I texted her the link to this forum.. Hopefully some of what you said make sense to her.

Again, if wife decided to take a chance, I will let her do it. Thanks to the rentals, the rental income is sufficient to support the family. Wife has a good head over her shoulder.. Its the emotional part that is tough to deal with.. When your best fried for 20 years, at the verge of losing everything, what would you do?

Elliot, my friend,

You have been deceived. I hear panic in you post and Satan loves to step in.

No on divorce and

No on a loan/investment.

You say you want to delve deeper into Biblical principles - BOTH decisions are absolutely disobedient to God’s Word.

God gives his children tests. You have been given a test. Will God find you obedient to His instruction?

Scripture says to seek “multiple wise counselors” for large decisions. I’d be happy to talk with you.

Re-read DJ’s post 10 times!

Elliot,

Re-reading your post.

Wife decides to walk AND give HER friend $200k. Something is terribly wrong here. You are not getting the whole story.

And one discussion, no matter how long, is not worthy of a $200k investment in a business you have no experience/knowledge in.

Based on your description of the “friend” I would probably not rent to him, let alone loan him my nest egg.

I ruly believe you are being swindled.

Please stop this.

I'm a BIG fan of Robert J [CA] and respect what he says, and his response here was spot on.

Elliot,

You and I were typing at the same time.

Glad to hear you did not send the money.

Your post is emotional and you refer to emotions. Business and financial decisions based on or guided by emotion ALWAYS lead to disaster.

I am sorry your friend (her friend?) is going thru a tough time. The BEST thing you can do is offer prayer and emotional support, NOT money.

You say she is sharp and you know how to fix problems, do THAT. Neither require money.

The friend is in financial trouble because of their own actions. This is the best economy we’ve had in YEARS. If a person cannot make it in this economy they don’t really know business.

Stay strong. Your first obligation is to YOUR family, not fixing a dying business.

And NEVER make a major decision when you are emotionally stressed.

Would this guy be there for you if you were in dire circumstances?

WMH is incorrect. It is not against the law to gift $200,000. But any amount over the annual exclusion ($15,000) must be reported to the IRS on a fight tax form.

They simply keep track of any amounts over the annual exclusion ($15,000 can be given away each year to as many people as you like but amounts over that per person must be reported/tracked).

When you die the amounts you gave over the annual exclusion are deducted from your lifetime exclusion which is currently a little more than 11 million.

So then your estate would owe inheritance tax on any amounts over the 11 million exclusion. Or in this case your amount would be $11,000,000 - $185,000 = $10,815,000.

Happy to report, wife decided to put family first..

That money will be used to pay down mortgage.. That was emotionally charged, draining 24/48 hours.

Whew! Very late to this party but glad to see you’re not lending the money.

You can’t borrow your way out of debt. As we say in evictions, if they need more time the courts will give it to them.

So happy you made that decision.

Focus on your marriage with time ... you clearly still have a civil open line of communication and that's the first step.