Thread: Small dilemma with a realtor

This could have an effect on your name or credit.

Another question is why is your cousin's credit shot?

And many people would advise against mixing family or friends and business.

I would be make sure your cousin does not intend to apply for mortgages using your identity & information.

No legal advice given or intended.

There's obviously a risk here and the easy answer is to just say no. I can imagine you'd want to be the good guy and help out in this situation and it might be hard to decline, but this could create larger problems in the future. Also, if his credit is shot, that could be a reflection of what he's capable of doing to your credit. I don't mean to sound like a downer, but just protect yourself... it's a big decision.

Real estate now a days as we know is quite popular now next to MLMs. About your concern, your cousin have a nice plan of building a corporation for a real estate business. He wants to do real estate investing and make money. But everything must be planned first. It's a serious matter because it talks about money and properties. As you said, your cousin's credit is shot. Once you wanted to engage into this business you know how much money it will take. Now, he asked your help because your credit score is good and he wanted to make use of your name to apply several properties for buy and sell. Before you're going to take the deal the question is, do you like the plan? What are your plans for this business? You must set an agreement for the possible problems might encounter. You must deliberate first before making any decisions seriously. Also, if you don't feel like having this business and afraid to take the deal, you can help him by simply let him make use of your money and let him just pay you once he earn to the business he wanted to build. For sure he can make money through it. At least you are safe and free from any circumstances might happen in the future.

Any good business person will tell you that putting your name on someone else's business is tantamount to suicide. Any investment in real estate requires huge money and huge risks and with the state of the industry, it would mean that you might loose a huge chunk of money during the first years of the business, if not worse, that you might not get this business up and running at all and you are left with a huge demerit in your credit score.

Thank you all for the prompt responses. I will post any issue I may have and get your feedback. Again, thanks a lot.

As you said, you cousin has bad credit record. If he use your credit, there will be possibility that you can get bad credit also and it reflects your name. Sometimes, don't just trust to anyone even your relatives because we don't what's in their mind.

Talk to an attorney. If your business is drawn-up and incorporated in the right manner, you should be able to shield your personal credit from liability. However, as Mark already hinted, I am one of those people that is a proponent of not mixing business with friends/family.