Friday the 13th. In spades.

Amy and I are in the really strange real estate deal. We have leased a home that we own about five miles from here to a couple of investors. They have an option to purchase it, and their intention was to find a tenant buyer and do a lease option until the prepayment penalty expired.

Meanwhile, we are leasing the house we live in from the same investors. The whole idea was to move my family closer to the our community theatre. We tried selling the other house, but with the prepayment penalty, we couldn't find a buyer at a workable price.

The investors took out a second mortgage on their home (the one they live in) to facilitate the deal, and set it up as a line of credit. They used this line of credit to cover the down payment on the house we now live in, to make some repairs and upgrades to our old house, and to carry the mortgage, taxes, and insurance on the other house.

They didn't do their due dilligence on the first set of tenant buyers, and the family that moved in couldn't keep up the payments on the option. To make matters worse, the investors allowed the tenants to finance the option premium. First the tenants reneged on the purchase option, but stayed in the lease. Then they decided to divorce and walked out on the whole enchilada.

House has been vacant since.

Investors are in about $50,000 total so far.

With real-estate values falling, the investors debt to income ratio fell, and the bank stopped their line of credit. It looks like they managed to make the March payment, but we're watching to see if it reverses. (Crossing fingers that it doesn't.) Got and email from one of the investors today, asking if she could lower the asking price to make a sale more attractive. She is hoping for a quick sale to unload it.

Which leaves Amy and me with a dilemma. Both of the investors are friends, and one is a really close friend (though there is another strain on our friendship at the moment). If they can't come up with the cash to carry the vacant house or sell it quickly, we have to choose between carrying it ourselves and defaulting on the lease on the house we live in to save our credit, or letting that other house go into foreclosure and destroying my credit.

To make it more complicated, we like the house we're in and don't want to move back to the old house.

Oh, and since it's been on the market and it's a rental, the lender won't even talk to us about a refi.

Are we having fun yet? Blech.

What we need is an income increase of about $1500 per month so we can carry that house too.