Art Fried borrowed money from me on a property to pay off a prior loan, and finance the fix-up of the property. The loan was for a 6 month period. He made several payments, then started paying late and then payments stopped.
Without informing me, in the 4th month he sold the property to another investor, without paying off the note. The buyer was not fully aware of the details of the loan, and he promised to pay off all debts from the sale. He gave a copy of the paid off loan to the buyer, rather than the loan to me.
The money was never used to repair the property. When we started foreclosure, the property was "coincidentally" vandalized, stripped, and flooded. This "coincidence" happened on many other properties he owned.
The property was then worth 50% of the loan amount and would require another $75,000 to repair.
He is liable for the losses since the Anti-Deficiency protection does not apply on multi-unit properties, and non-acquisition financing.
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