Ol Gilmore needs some advice, big bankrollers

[Gilmore Happy]

I rarely ask for advice because I do quite well CRHing. But today I had an opportunity present itself...and I need advice.

A guy in my military shop wants to invest $5K in my online business and I will give him a 10% return, in 6 months. I can far exceed this...BUT I can only buy my inventory at certain times of the year, next one being much later. However, I didnt tell him this part. He is pushing pretty hard because he has $50K of investing money....so thats the background.

So the CRH part of my brain tells me to use his $5K in addition to the $4K budget that I currently work with. He doesnt have to know how his 10% is delivered...so why cant I hunt with his $5K, sell $500 (10% of his 5K) worth of my finds for cash when the 6 months is up....and keep the rest of the silver spoils for myself?? The only risk I can think of is, I get robbed and lose his 5K...and probably my 4K. I definetly dont want to let him know about CRH, even though hes in the San Diego area, and not Phoenix.

Please comment and let me know your thoughts, especially if you have a bigger bankroll. Thanks!!

 

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[namster]

What? There's no silver in Phoenix!!

Id take the $5K and roll with it, if the boxes are producing. Cant loose IMO unless you are robbed, as you put it.

 

[palidin20603]

This is a bad idea and dishonest. If someone robs you while you are buying boxes, then you could lose it all. Iwould just be honest with him about the inventory issue. He did not give you the money to do whatever you want with it, he gave it to you to invest in a particular business. I can see your point, but nothing good can come from misleading him.

 

[namster]

This is a bad idea and dishonest. If someone robs you while you are buying boxes, then you could lose it all. Iwould just be honest with him about the inventory issue. He did not give you the money to do whatever you want with it, he gave it to you to invest in a particular business. I can see your point, but nothing good can come from misleading him.

Do you own a business? Sincerely curious.

 

[baddbluff]

Happy - Just take ALL THE MONEY and buy like $50k in halves from all over the city, all at once, and see if you can get to the bottom of the pallet... oh wait, someone in Phoenix already did that. Seriously, though, if the boxes were producing I would probably do it, but it doesn't seem like they are lately. I would only use his cash if I had $5k of my own to give him if I did by some weird reason get robbed.

Having a big bankroll is nice, though, if you have a good dumping strategy set up.

Good luck to you my friend.

HH
BB

 

[Farchaus2k]

Happy,

Love your posts and good to see you back here. In all honestly, something about your plan smells like a Ponzi Scheme. I'd hate to see some kind of audit or unforeseen mishap mess up the good thing you've got going. Just my opinion. Happy Hunting.

 

[Xiao en]

Hummm a sticky situation. IMO this man is giving you 5k to invest into your business. Unless your business is CRH then I would apply the money to your inventory. I would just let him know that you are interested in his investment at a date closer to when you order so you have max time to sell said inventory.

Question: Guarenteed money: How much farther ahead can you be in 6 months with a larger bankroll in your business inventory vs investing the bankroll into CRH.

Something to think about, this man is giving you money, he expects a return on his investment, he could also be one of those annoying obnoxious individuals that thinks he knows your business better than you and wants to take an active part with questions and ideas of how things can be done "better"

Sure we all want to do more but are you doing ok now without this extra 5k and extra advice?

 

[d2arcing]

am a little confused. so if you are doing fine why do you need his 5k to boost your box volume? cant you dump and roll your 4k better?

 

[Gilmore Happy]

Yes, Im the sole business owner. I hire employees on a seasonal basis, about 7 days in total. The rest is online, with no overhead after the set up is done.

I do have the $5K to cover it.

I know it sounds shady, but the way I see it...he is really investing in ME (my entreprenuerial abilities) for his 10%. Does it matter how I get it?

I was going to hunt with a total of $9K in total, in my theory, could search through more coin weekly. I only hunt during my lunch breaks, and my 2+ hours a day communting( this is so I dont take away time from my online biz that I work at night. I have a corporate job during the day where Im salary, and Im in the Reserves for military one weekend a month).

I appreciate the comments so far, interesting viewpoints. I want to debate this more as I really respect most of the minds on this forum. Thanks again, off to work.

 

[Piledriver]

The question is: Do you REALLY max out 4G just on your lunch breaks and 2 hours per day?
And does your area have capacity for you to double your Rolling?

Consider that when you double your swing, you will more than double your risk. Once you take the 5G the risk is your risk, and the losses are yours.

You also run the risk that the extra dumping will get you out the door of more banks.

I think that every coin Rolling area has a threshold of diminishing returns.

But if the extra swing can generate that much extra silver--GO FOR IT !

Keep on Rollin' !

 

[namster]

Yeah, in my experience hard money lenders dont really care what you do with the money, they are investing in the person. The last hard money lender I used (friend of my parents) lent me 10K for inventory at 10 points so he wanted $11K back in 12 months. I had to pay back no matter what, store robbed same as loosing 10K CRHing. You pay back principal plus interest by the agreed upon time from no matter what.

 

[kontrapunktus1750]

I'd turn down any such proposition, but if I were inclined to take him up on it, I would:

1. Explain the inventory situation.
2. Have concrete written terms set out before any money changes hands, limiting your liability and maximizing your freedom with the investment.
3. If this is to be a no-lose proposition for him (i.e., he's going to get his $5k back regardless at the end of the term) make sure you are able to produce that money on demand at any time.

 

[BuffaloBoy]

i wouldn't, if the friend finds out, he might not take it easy, especially being in the military. The military is about RESPECT. my 2 wheat cents.
Buff

 

[Farchaus2k]

A lot of major cities / counties have a local Small Business Administration, or something to that effect. Many of them have lawyers on-site who will meet with small business owners free of charge and offer advice or give consultations on local and state laws. You might want to check-in with one of them and see if everything you want to do is on the up-and-up. Just a suggestion, don't want to see you get pinched. Take Care.

 

[jrf30]

He is specifically investing in your business. He even says so. And you presented it that way. If you take the money and use it for something else, then even if you DO give him his 10% back, you are legally misappropriating investor money and can be liable for fraud. Not to mention the fact that you are lying to him.

Tell him you will use the money when it is needed. And if he wants, you'll take the money a little earlier and give him 12% instead of 10%, and you want to use it for CRh in the beginning. If he agrees, then great. But if someone gives you money for your business, and it is stated as for your business and you use it for something personal, you are breaking the law. I"m not talking logic, I'm not talking rationalization, I;m not talking what sounds okay. I'm talking legality. It is breaking the law.

If you don't believe me, ask the AZ corporation commission (Anonymously). You can put your entire business at risk. Not to mention that fact that is it just wrong to mislead the person even if nothing bad happens to you. There is right and there is wrong, and even if you don't get caught doing wrong, and no one finds out, it is still wrong.

Yeah, I'm pretty black and white on that issue. I wish you the best of luck with your CRH, but think taking money from an investor for a business and not using it as promised is both wrong AND illegal. regardless of how you rationalize it by saying "he is really investing in 'me' anyway". Nope. Not if he was TOLD that he is investing in the business.

Just be open, explain it, get approval, and then what is wrong becomes right, and what is illegal becomes a personal loan and not illegal. :-)

 

[BuffaloBoy]

Jrf30, very well said. I don't think your post could be worded more precise and to the point.
Buff

 

[quiksilver]

To increase my bankroll i took advantage of some credit card offers. The best one was 4% transaction fee 0% interest untill august 2013. As most of my money has been tied up elswhere the $40 per thousand was worth it and has already been covered. I just have to make sure i dont spend the money before august 2013 on anything but boxes of halves.

 

[Gilmore Happy]

BuffaloBoy, It's a military member in my shop of 7, a friend as well. Weve been deployed together, plenty of respect both ways.

John, this is more of a hard money lend, a handshake agreement. I do understand the legality of investing and businesses. But this is a grey area in this situation...this guy really doenst care how he gets his 10%. After hearing some of the viewpoints, I am shying away from the original proposition.

I might CLARIFY the expectations with him...somthing to the effect of, "Jim" you dont give a **** how I get you your 10% right? And he will say, hell no, just get me 10% on my 5K. If this is the case, do I get the greenlight?

 

[MIhunter]

I am not a lawyer but there are 2 key elements of fraud, (1)lying for (2)finacial gain.
If no matter what happens you repay his investment ($5000) then you are okay.
But I would make it clear with him what you intend on doing with his money.
Or I would make it clear to him that you are going to use his money for whatever legal business activiy you choose (he is investing in you).

 

[BuffaloBoy]

do whatever makes Gilmore Happy


I now understand better on the relationship between you two, I don't see how things could go wrong, as long as he agrees. Though I am sure you don't want to mention CRH, you could mention money to play around with.
HH,
Buff