# Who's being the jerk in this financial situation? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [July 8, 2015, 3:52pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587 "2015-07-08T15:52:17Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [July 8, 2015, 5:45pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587/21 "2015-07-08T17:45:32Z")
> [@Jas09](#): > > These are the key questions. OP’s phrasing is “I can give you 20% return in about 12 months”. That is extremely vague, especially if nothing was written down. > > I think there are two basic ways this type of deal could have been structured: > > 1. Fixed-interest short-term loan. In this case 20% over 12 months. Once you get repaid the loan is satisfied and Jerry is a jerk deserving of whatever punishment you deem appropriate. > > 2. Equity stake in the flip. You purchased Z% of the home with your stake (Jerry did the same). You are entitled to Z% of the sale price minus expenses, including reasonable expenses for Sandra’s time. This type of thing would require quite a bit more bookkeeping to sort out and settle, and is not something you’d want to go in on with a family member on verbal contract alone. Yep, I voted Sandra right, Jerry wrong, but that is due to how Skald worded the agreement. Perhaps Jerry thought the agreement was a % of the Equity, in which case, he’s right. ---
**Author:** ![Becky2844](https://avatars.discourse-cdn.com/v4/letter/b/91b2a8/32.png) [@Becky2844](https://boards.straightdope.com/u/Becky2844)\ **Post date:** [July 8, 2015, 5:45pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587/22 "2015-07-08T17:45:56Z")
**Skald** you are not a chump. Jerry got his 20% and should shut up. Your cousin sounds great; wish I could hang with you all sometime. ---
**Author:** ![Gary\_T](https://avatars.discourse-cdn.com/v4/letter/g/3ec8ea/32.png) [@Gary\_T](https://boards.straightdope.com/u/Gary_T)\ **Post date:** [July 8, 2015, 6:14pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587/23 "2015-07-08T18:14:50Z")
If Sandra would be happy with a 20% return, she’d look for investment opportunities such as she offered her cousins here. However, for all the time, money, risk, expertise, etc. involved in flipping these houses, it’s not worth it for 20% – she needs 100% to make it worthwhile. If Jerry wants a 100% return, then he should do what Sandra does: identify and acquire suitable property, invest the large sum required (which in some cases means finding investors for part of it), see to the rehabilitation of the structure, and sell it. Not having done any more than invest a small portion of the purchase price, he is in no way whatsoever entitled to the higher rewards commensurate with doing all the other things necessary to make a deal like this profitable. He is being at least shortsighted, if not willfully ignorant, to even mention the prospect. He’s probably quite lucky to have gotten the 20%, as well as lucky to have not gotten punched in the throat yet for being a jerk, and should be grateful for that. ---
**Author:** ![Anaamika](https://avatars.discourse-cdn.com/v4/letter/a/5f9b8f/32.png) [@Anaamika](https://boards.straightdope.com/u/Anaamika)\ **Post date:** [July 8, 2015, 6:19pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587/24 "2015-07-08T18:19:29Z")
Trout slapping time. Also, chess pie? I think it is from one of your threads I got the idea of buttermilk pie, could it possibly be better than that? That buttermilk pie was the bestest thing in the entire world… ---
**Author:** ![Skald\_the\_Rhymer](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Skald\_the\_Rhymer](https://boards.straightdope.com/u/Skald_the_Rhymer)\ **Post date:** [July 8, 2015, 6:22pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587/25 "2015-07-08T18:22:07Z")
> [@Anaamika](#): > > Trout slapping time. > > Also, chess pie? I think it is from one of your threads I got the idea of buttermilk pie, could it possibly be better than that? That buttermilk pie was the bestest thing in the entire world… It was. There’s a diner in Buffalo that sells some really good chess pie, or did ten years ago. I don’t remember the name but I’m sure you have better Google-fu than I. ---
**Author:** ![Intergalactic\_Gladiator](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/intergalactic_gladiator/32/112_2.png) [@Intergalactic\_Gladiator](https://boards.straightdope.com/u/Intergalactic_Gladiator)\ **Post date:** [July 8, 2015, 6:28pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587/26 "2015-07-08T18:28:31Z")
You had me at hot strawberry blonde sidekick. ---
**Author:** ![Yllaria](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/yllaria/32/3452_2.png) [@Yllaria](https://boards.straightdope.com/u/Yllaria)\ **Post date:** [July 8, 2015, 6:44pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587/27 "2015-07-08T18:44:58Z")
I was going to say that no violence was needed, but being slapped with a wet trout is mild enough. Trout away. Twenty percent is a great return, especially with that quick a turn-around. I wouldn’t mind calling the folks “kicking in X thousand dollars” investors, but they’re not owners and they’re not partners. If it was me, I’d be thrilled that she made a hundred percent profit (although there were probably expenses that Jack has no clue about) because that level of profit was what made her able to confidently promise a 20% return to me. If she had only made 20%, it wouldn’t have been worth her while to jump on the opportunity. considering the risk. With a bigger profit possible, hey, she might have another 20% opportunity in the future. ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [July 8, 2015, 7:06pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587/28 "2015-07-08T19:06:58Z")
I’m going to go against the grain here because it’s not clear to me from **Skald** ’s story whether the X thousand dollars provided was a loan or an equity investment. If Sandra had said, “loan me X thousand and I’ll pay you back with a 20% return,” then fine. But if Sandra said, “give me X an thousand investment and I can probably make a 20% return on the project,” then all partners should share in the profit proportionally to their investment. The wording in the OP makes it very ambiguous about which situation actually occurred. Which makes me think that Jerry and Sandra perhaps had a difference of opinion about the nature of the investment. ---
**Author:** ![Anaamika](https://avatars.discourse-cdn.com/v4/letter/a/5f9b8f/32.png) [@Anaamika](https://boards.straightdope.com/u/Anaamika)\ **Post date:** [July 8, 2015, 7:12pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587/29 "2015-07-08T19:12:17Z")
This is why we can’t have nice things, by the way. First of all, if I was Sandra, I’d definitely never cut Jerry in on any deals. After that, I might not cut any of the family in. Why, if the word is just going to get back to Jerry and I have to hear his whining again? ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [July 8, 2015, 7:23pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587/30 "2015-07-08T19:23:02Z")
> [@friedo](#): > > I’m going to go against the grain here because it’s not clear to me from **Skald** ’s story whether the X thousand dollars provided was a loan or an equity investment. > > If Sandra had said, “loan me X thousand and I’ll pay you back with a 20% return,” then fine. But if Sandra said, “give me X an thousand investment and I can probably make a 20% return on the project,” then all partners should share in the profit proportionally to their investment. But Sandra invested more than the others, partly by acting as general contractor and doing some of the carpentry and painting. Plus she’s the one who found the property. So part of the money she made was compensation for the labor she contributed. Jerry, Skald and the others were passive investors. ---
**Author:** ![Tzigone](https://avatars.discourse-cdn.com/v4/letter/t/839c29/32.png) [@Tzigone](https://boards.straightdope.com/u/Tzigone)\ **Post date:** [July 8, 2015, 7:25pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587/31 "2015-07-08T19:25:05Z")
Were they investing in the house or in her - I mean, was she obligated to get them the x+20% even if the house didn’t sell? ---
**Author:** ![pulykamell](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pulykamell/32/3166_2.png) [@pulykamell](https://boards.straightdope.com/u/pulykamell)\ **Post date:** [July 8, 2015, 7:33pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587/32 "2015-07-08T19:33:59Z")
> [@Tzigone](#): > > Were they investing in the house or in her - I mean, was she obligated to get them the x+20% even if the house didn’t sell? That’s kind of a question for me, but I went with “A” with the info in the OP. This is a question I would have asked at the proposal, and then made my own calculation as to whether a 20% ROI without a promised payback is worth the risk of losing some of my money, or if an equity investment arrangement (e.g. I own X% of the property and share in the profits) would better mitigate the risk. As given, and as things worked out, and if nobody asked any more questions, then I have to go with “A.” ---
**Author:** ![muldoonthief](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/muldoonthief/32/3188_2.png) [@muldoonthief](https://boards.straightdope.com/u/muldoonthief)\ **Post date:** [July 8, 2015, 7:34pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587/33 "2015-07-08T19:34:54Z")
> [@Tzigone](#): > > Were they investing in the house or in her - I mean, was she obligated to get them the x+20% even if the house didn’t sell? People have been asking that question since the 7th reply, but apparently **Skald** would rather trade clever quips with his mutual admiration society instead of answering relevant questions. ---
**Author:** ![Skald\_the\_Rhymer](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Skald\_the\_Rhymer](https://boards.straightdope.com/u/Skald_the_Rhymer)\ **Post date:** [July 8, 2015, 7:51pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587/34 "2015-07-08T19:51:42Z")
> [@muldoonthief](#): > > People have been asking that question since the 7th reply, but apparently **Skald** would rather trade clever quips with his mutual admiration society instead of answering relevant questions. My understanding from. The get-gi was that Sandra was planning to pay us all back the 120% she promised regardless of whether the deal was ultimately profitable for her. But I wanted to read the deal over again first to be sure. (That was the agreement, by the ye way.). As I wrote up thread, I owe Sandra enough favors that I’d have been willing to do it as a zero-interest loan. ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [July 8, 2015, 8:04pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587/35 "2015-07-08T20:04:22Z")
> [@Dewey\_Finn](#): > > But Sandra invested more than the others, partly by acting as general contractor and doing some of the carpentry and painting. Plus she’s the one who found the property. So part of the money she made was compensation for the labor she contributed. Jerry, Skald and the others were passive investors. If there was a partnership agreement then this should have been spelled out in minute detail. But it sounds like there wasn’t and it wasn’t. ---
**Author:** ![muldoonthief](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/muldoonthief/32/3188_2.png) [@muldoonthief](https://boards.straightdope.com/u/muldoonthief)\ **Post date:** [July 8, 2015, 8:07pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587/36 "2015-07-08T20:07:57Z")
> [@Skald\_the\_Rhymer](#): > > My understanding from. The get-gi was that Sandra was planning to pay us all back the 120% she promised regardless of whether the deal was ultimately profitable for her. But I wanted to read the deal over again first to be sure. (That was the agreement, by the ye way.). As I wrote up thread, I owe Sandra enough favors that I’d have been willing to do it as a zero-interest loan. Thank you. Then assuming that Jerry had the same understanding, he does not have any claim whatsoever on anything beyond the 20% he was promised. ---
**Author:** ![Dogzilla](https://avatars.discourse-cdn.com/v4/letter/d/e480ec/32.png) [@Dogzilla](https://boards.straightdope.com/u/Dogzilla)\ **Post date:** [July 8, 2015, 8:10pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587/37 "2015-07-08T20:10:53Z")
I think 20% is a pretty good ROI, especially in 9 months, rather than the promised 12. ---
**Author:** ![Icarus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/icarus/32/72_2.png) [@Icarus](https://boards.straightdope.com/u/Icarus)\ **Post date:** [July 8, 2015, 8:20pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587/38 "2015-07-08T20:20:33Z")
It sounds like Sandra essentially issued a Bond with a stated return and timeframe. Jerry sounds like a very naive investor. Practically every investment has someone taking a cut off the top, be it small or large. As the investor, we accept the terms if what we get out of it is satisfactory. So if you tell me you are going to give me 20% on my money, and I’m happy with that, then it shouldn’t matter if you are making 2000% on the money in the meantime. Now, Jerry’s mistake was digging into the books - if he wasn’t happy with 20% he shouldn’t have taken the deal up-front. His second guessing is what really deserves the full cold wet slap with a 2 weeks dead stinky trout. ---
**Author:** ![Death\_of\_Rats](https://avatars.discourse-cdn.com/v4/letter/d/a6a055/32.png) [@Death\_of\_Rats](https://boards.straightdope.com/u/Death_of_Rats)\ **Post date:** [July 8, 2015, 8:26pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587/39 "2015-07-08T20:26:21Z")
If the deal was “Give me $X thousand now and I will repay you 120% at the end of the flip” then you got what was promised and Jerry should shut up. BTW, if you are going to be (or are) a night-stalking vigilante then you should know that black is a terrible color to use at night as you stand out as a black hole in the field of vision rather than blending in. Go with Dark Greys and Blues for an urban environment and Dark Greys and Greens for a suburban or rural environment. ---
**Author:** ![Finagle](https://avatars.discourse-cdn.com/v4/letter/f/b19c9b/32.png) [@Finagle](https://boards.straightdope.com/u/Finagle)\ **Post date:** [July 8, 2015, 8:28pm UTC](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587/40 "2015-07-08T20:28:44Z")
I vote for the Dark Knight Returns 120%. [Previous page](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587.md?page=1) [Next page](https://boards.straightdope.com/t/whos-being-the-jerk-in-this-financial-situation/724587.md?page=3)