I’ll preface this by saying we are newly engaged in our early-mid 20s. My fiancee’s brother and his wife are 11 years older. They’re both extremely well-educated and have had high-powered careers in finance and consulting. My fiancee is dazzled by their accomplishments but I’m more wary of people in general 🤣 and also of investing with family. Anyway, she recently bought condos as an investment property. My fiancee forwarded me this email from her. I am not that educated in investing in general but how on earth can you get a 10% return after only 2-3 months?? Is it even possible? Also, English is not her first language so any grammar issues are *not* a red flag. Like I said, she’s super smart which makes me even more on guard…
“Lastly I am very excited, last Saturday the condo developer’s agent accepted my offer so we will own 5 condos in July. It seems like we are going to be able to manage the financing on our own. I am getting 7% cash back at closing and I just need to put 5% down.
The first two condos are going to be in the market in October, so I am very confident we can have some of the investing liquid by early next year (Jan/Feb). However, if you want to invest but want your invetment 100% liquid, I can take your money and put it in my bank account without actually using it ( in order to show more cash reserves and make sure the financing goes through without any problems). Investing in the actual condo project will give you a 20% APR, Putting your money in my bank account (100% liquid 2-3 months after closing) will give you a 10% APR.
Think about it and let me know, we come back May 22.”
Investment properties – is my future SIL out to scam us?
byu/dms2628 inpersonalfinance
Posted by dms2628
10 Comments
Don’t do it. The gain are all dependant on renting the condo, that the tenants pays, that there is no damage/repairs. On top of that, you have nothing in your name (it would be all in your SIL) so you can’t sell it (even at loss) if anything goes wrong.
Even if she thinks it’s not a scam (which certainly could be), I wouldn’t touch this at all.
She’s probably not trying to scam you but it’s always a safe policy not to mix family and business
She would no longer need the money 2-3 months after closing, so she would be able to return that. I assume she would not return the actual ROI until selling the condos which would take until sometime in 2027.
10% for just loaning her cash for a few months is a great deal and probably something she’s offering him because he’s family.
I would ask her if she can guarantee the refund of the initial money by August 2026 and the 10% by March 2027 (after she intends to sell the first 2 condos). Note than a 10% APR is an annualized return so you would get a prorated amount based on how long she takes to return the full amount.
Then it’s up to your fiance if he trusts his brother enough to do at least the first part. I would, but not every family would.
I’d never trust a promise of 20% APR, even if it’s just fantasy/ignorance and not malice.
> I can take your money and put it in my bank account without actually using it ( in order to show more cash reserves and make sure the financing goes through without any problems).
She’s trying to juice her bank accounts to secure financing. The lender may take a look at her statements and question where this big deposit came from.
> Investing in the actual condo project will give you a 20% APR
There is no way she can actually guarantee a 20% return. Even if her calculations are correct, everything would have to go exactly as planned for that to happen (Occupancy on day 1, no late payments from tenants, no evictions, no expensive maintenance items, etc.), and as we know: “Everyone has a plan until they get punched in the mouth.”
Even if she is not purposely trying to scam you, she might be relying on overly optimistic numbers. I’d tread carefully on this one.
If it’s not a scam it’s because the risk makes up for the gains.
Do not get mixed up in this. It is probably not an outright scam, but it is dangerous. Never do anything like this without an iron-clad contract, like you would get with a bank. because technically your money is her money as soon as you give it to her. It’s up to her good will to give anything back at all, since you won’t have anything in writing to use against her in court.
Also, just never mix family and money. Or friends and money.
10% return and 10% APR in three months are two very different things. APR means the rate is annualized, which means that for three months it’s about a 2.5%; request more clarification on this.
As for the investing, are you actually investing in the project, or loaning her money for her to invest? If you are actually investing in it, guaranteeing a rate of return is a red flag.
If you trust them 100% AND their ability to pay you back, consider just loaning them money. 10% total return for loaning her money for 2-3 months is way too high, there’s no reason for her to borrow from you at such a high rate. If it’s 10% APR, yeah it makes sense on both ends. Get everything written down and signed. Don’t invest in the property itself, illiquid investments aren’t recommended for people new to investing.
Make your own investments, so you can be in control of your money.
Since this has come up you might want to have a heart-to-heart with your fiance. If he has no problem handing over large sums of money to his family – or anyone else, with no oversight or protection, you need to know that before the ceremony.
Once you’re married, things like this can become even more of an issue, and have the potential of causing real marital problems.