If you feel that property values will drop 30% maximum from current values then I would not hesitate to invest in a first T.D. with a loan to value ratio less than 55%. The worst case would be that you foreclose on the property and either rent it out or resell. There is enough equity to protect your investment. Research the rental market. If you foreclose and end up with the property at 50% of current market value I think you would be pleased. My personal criteria for T.D. investing is buying notes that I hope the borrowers will default on so I can profit from the discounted value of the asset securing the loan.
