Tag Archives: area

A friend of my made me following offer: He has a lot in a good area, but does not have money to build on it. He offers me to finance the construction (legaly I will be purchasing the land and paying for the construction), he will take care of everything, I just need to put my name on the loan. I also sign an “Option to Buy” agreement, so he has an option to buy a house (at predetermened price) once construction is complete.
There is a risk, if Real Estate market will crash, I might end up with a house that it cost more to build then it can be sold for.
For the risk I will be paid $15K when house construction is complete (in 12 month).
State: Colorado
I need to finance $750K
A friend has already invested ~$200K into the house (land, architect, approval, demolishion of an old house, etc.)

Does this appear to be a sound deal? Where can I get more information and advise?
I’d say that risk is really small. Something really bad has to happen to affect the prices on real estate to drop below non-profit point. I also don’t do it because he is my friend. How hard is it to get me screwed on this?