Should I Invest with My Friend in Foreclosed Home???

[Jeff Gardner]

Okay. Here's the deal:

My friend found a foreclosed home at auction that is on the tax rolls for $650,000. He showed me the photos on zillow - and it appears to be a beautiful 4,000+ square foot home in Dallas that could be work $650k. The comps in the paperwork show sales in the same area (from 2013) in the $600 to $700K range.

He wants us to go to the bank together to "get our ducks in a row" and... together... qualify for lines of credit totaling $400,000. His plan is to try to get it for $400,000... and then immediately sell it for $500K to $650K and split the profit.

Even though he went to real estate school 20 years ago - and was an agent a few years back then... I'm wary about getting a line of credit and being on the hook for $400K... with the assumption that it WILL sell for $500K or $650K afterwards. He makes it sounds like a sure thing - but I've been burned on real estate deals before.

What are your thoughts on this? When I told him I was wary about doing this, he got all upset and told me it was a sure thing. 

I do want to get into real estate - but I think learning about it first... maybe picking up a book, reading on here, or talking to someone with experience... might be a better first step than running out and getting on the hook for $400K.

Am I too cautious? Should I do the deal?

Or what steps should I take to know whether or not I should do the deal?

Thanks for your help/advice.