QUOTE (nicholsons @ Aug 27 2010, 11:04 AM) .. Any and all input is appreciated.
be aware of the risk of non-payment or fraud even.
IN GENERAL DO NOT DO IT .. unless you do a friend a favour (after a divorce perhaps) or you can pay the debt in cash.
If you want to do it .. and the payment makes sense for the risk, look for:
a) gross rent levels achievable
b) realistic vacancies
c) expenses
d) debt payments / month
e) ownership of asset
f) history of person asking you
g) personal guarantees that this person asking you is giving you in the case of non-payment of debt
h) real value of asset vs. debt
i) see the asset yourself .. do not believe an appraisal or the person. Ask yourself: am I OK owning this asset now that I have guaranteed XXX $s on it ?
m) ask yourself: what happens if interest rates rise from 3.x% to 6% in 3 or 5 years or on re-finance time ?
In general, unlike the fee you get is VERY HIGH AND ONGOING i.e. monthly, it is usually not worth the risk.
One option is for you to become the owner so you can control the asset if payments are not made .. or have enough cash reserves to pay the mortgage off if need be.
I have been guilty of sloppy help for others in the past too .. and here are two sources from a biblical perspective that you may find useful too:
http://protestantism.suite101.com/article...._say_about_debt
http://www.moneyhelpforchristians.com/what...ebt-and-credit/
Most problems in this society is TOO MUCH DEBT i.e. too easy credit (car loans, home loans, mortgage loans, corporate debt, foreclosures, levered buy-outs, ..) and we saw the correction in 2008 / early 2009 .. less debt is better !!
