The Buddy System?

[duncan_m]

Thought of an idea on the way to work about ways to leave the workforce

I called it "The Buddy System".

The "Buddy System" would have two people (the Buddies), both who currently work but who want to exit the workforce to generate income off Real Estate full time.

Both of the Buddies have around $150K in equity available.

The Buddies form a Partnership

Both Buddies apply for and get a Line of Credit against their equity.

One Buddy quits work, his name is QuitBuddy (he applies for his LOC first though)

One Buddy stays at work, we'll call him TreadmillBuddy.

The Buddies then have $300K in funds, but QuitBuddy will need to draw down around $50K-70K in living expenses in that time. so we're down to about $230K. $230K in funds should be enough of a float for someone to do at least 5-6 cosmetic renovations and resales in a 12month period.. assuming only 4x$50K profit each (1 every 3months) thats a $200K profit. It could also be quick resales, no renovations, because QuitBuddy is out and about 5-6 days a week looking for deals etc.

At the end of the period. QuitBuddy is refunded his costs of living (say $70K) and then the profit is split 50/50. So TreadmillBuddy gets $65K cash and QuitBuddy gets $65K cash. TreadmillBuddy then quits his job (he's got enough to live on for at least a year) and the pair start to do another round of renovations (TreadmillBuddy might get another LOC first).

One Buddy needs to keep working for at least 1 year so that the living expenses for the pair is $140K in the first year.

Not sure on the specifics.. it seems like a kinda nice idea though! Sort of like Leg-up approach to get over a wall.


Duncan

 

[asy]

Problem #1...

Who gets to be Quitbuddy?

asy

 

[Sim]

Sounds similar in concept to what Steve McKnight and David Bradley did - except they were already business partners. David continued the accounting business while Steve went out and worked out ways to make passive income.

 

[see_change]

me please

There also examples where one partner in a non business relationship has quit work and taken to investing , while the other partner keeps on working.

This has been raised in our household but again the question arises ... "WHO IS THE QUIT PARTNER ". We think we've found the solution, We'll both quit.....

see change

 

[Dr.Bob]

Great idea Duncan,

Perhaps it could be expanded to include a third person who could give up work to learn a building trade ie.'studybuddy'.

Maybe a strong young person to do the dirty work ie. 'muddybuddy'.

Or involve a retired person with lots of equity ie. 'fuddyduddybuddy'.

The concept may work well in the middle east to GET IN to real estate ie. 'scuddybuddy'

Regards,
The good Dr.

 

[Sim]

Don't forget the person who brings the beer - the buddybuddy.

Or the person who you accidently discover in the shower while renovating... the nuddybuddy

Or the more stout person who gets red cheeks after exerting effort carrying heavy equipment - the ruddybuddy

Try not to let people cut themselves on sharp edges and become your bloodybuddy.

Make sure that the person who crawls around under the house checking on things cleans themselves up before they come inside being the cruddybuddy.

mmm... I'd better stop there - starting to scrape the bottom of the barrel !

 

[Jamie]

Originally posted by Sim
mmm... I'd better stop there - starting to scrape the bottom of the barrel !

Too late...

What about the friend that has to put up with sub-par humour... the shudderbuddy...

Jamie

 

[Kevmeister]

Don't forget the person who brings the beer - the buddybuddy.

Sorry, Sim, you've got that wrong:

The person who brings the beer is the ...

StubbyBuddy

 

[geoffw]

A very old paertner might be a fuddybuddy.

 

[Steve Navra]

And the can't spell "peartner:

Might be the tippobudy

 

[Kevmeister]

paertner = dutch for partner.

Steve: classic!

 

[geoffw]

Tippobudy, typobudy, or Tippobuddy?

Probably tippoBundy (sorry Bundy).

Steve's been waiting to get back at me for that typo I picked him up.

Steve, I've given you lots of typos to pick on since then!

After all that, I'm not feeling too well.

A cruddyBuddy.

 

[sbe]

Must make sure you do your homework, lest you get stuck with the dudbuddy........

 

[Steve Navra]

Originally posted by geoffw

Steve, I've given you lots of typos to pick on since then!

Hey Paertner,

Of course I have been waiting, VERY PATIENTLY that is for the 'right moment' (Timing being everything in this business)

Besides your previous typos were a little too inane for adequate effect.

Sincerely,
Your bete noire buddy

 

[Luke]

This might just be apocryphal, but it's a story I've always liked about such an arrangement. The famous painter/printer Albrecht Durer once benefited from such a system.
Cheers everyone,
Luke

-----
Being part of a family of 18 kids (yikes!) must have placed enough pressure on the family finance, let alone when two of the kids both wanted to go to Nurembourg to study at the academy. They came to an agreement, one would go, the other would work in the coal mine for the four years of study to pay the fees. Then, by either sale of his artworks, patronage, or if neccesary by going to the mines himself, the second would be enabled to go to the Academy as well.

A coin was tossed, and Albrecht went to Nurembourg, and Albert went to the coalface. Well, the rest is history, Albrecht was a sensation, his etching, printings and oils were quickly recognized, and by the end of his study he was earning a considerable income from commissioned pieces.

On returning home he was celebrated and honoured. And in the meal, Albrecht stands to honour his brother who had made it all possible for him. After toasting him, he says "Now it is your turn"

But the response from Albert is unexpected, he is weeping, saying no, no! Finally he explains... the years of mining have wrecked his hands. Bones have broken, arthritis had set in, he cannot even hold a wine glass to return the toast, let alone paint fine art.

Hundreds of years have passed, and Albrecht Durer's famous works in every sort of medium hang in museams and galleries around the world, but the one you probably remember is a reproduction (often tacky, unfortunately) of just two rough, abused hands clasped together in prayer. The hands are those of Albert, a homage to all that Albert had sacrificed for Albrecht's success.

You see, no one - no one - - ever makes it alone!