Context is that she's asking me to help her get a mortgage and for some cash so that she can realize some stupid investment scheme she has:
As for your proposal, I don't know what you're asking of me... 19k cash + 300/mo indefinitely (interest-only mortgage)? What makes you think someone taking on all the financial risk would be willing to accept only 10% of the profit? That's not the way the world works. I'd have thought you'd learned that by now. I also see that the concept of risk vs. reward continues to elude you because it's apparent you still haven't figured out there are no easy and surefire ways to make money and that there is always a downside. Here's a tip... You're 65ish? People at that age aren't supposed to be taking big risks with money unless they have lots of it. Any half-decent financial advisor would tell you that the older you get, the safer your investments should get. Let's put it in gambling terms, since that's essentially what you're proposing I or anyone else do. Based on what you've said in the past, you're hoping to clear 200k above and beyond the purchase price? So let's say 390k after all is said and done? 19k for the house, another 20k-ish for moving and other costs (i have no idea what they'd be but i feel i'm probably being charitable)? My investment for a year would be 44k, in the absolute best case scenario. A sale at 390k would clear 200k. In reality, i'd be risking 44k to make 113k after cap gains taxes, though it would probably be even less after school taxes, "welcome" taxes, and other bs I'm probably not thinking about, but let's be kind and say i'd be risking 44k to make 113k (we'll get to the part about you giving me only 10% of the profit later). To make that bet, I'd roughly need odds of better than 2.6:1 for it to make any sense at all. Do you provide me a better than ~38% chance of making those odds? Meh... There is a lot that could go wrong in what you're proposing and I don't even know how to go about quantifying all the risks, which entices me to be conservative. A couple lessons on odds and gambling. 1) odds are probabilities representing the likely outcome of an event. They do not represent certain outcomes. 2) an intelligent gambler (as opposed to a degen) would only be willing to make that bet - even if he had the odds - if he also had a big enough bankroll to ride out the variance in whatever game he was playing. I have neither the the time nor inclination to work out the actual variance in the kind of transaction you're proposing, but I know right now I can't really afford to lose 44k without hating myself. 3) scared money makes bad decisions. To translate that into your circumstances: you have no money, you're worried about the future, and you're hoping for a big pay-off to make everything ok. In other words, you're reaching. Lastly, you're proposal of only paying me 10% of the profit negates all the numbers above. I'd be risking 44k to make 13k, if everything worked out perfectly (it never does). If it wasn't sold at the end of year 2 that would be down to 7-8k, I'm guessing. Time to take some math classes, Michelle. I don't see in what universe I'd make that bet.