usury investing in Georgia

[Michaela G.]

So, a friend of mine, let's call him Marcus, is asking me for advice. 

Personally, I would walk away, but he's emotionally invested, so, I'm trying to give him at least some tips, where he should ask for changes in the contract, which probably won't happen. 

He has been living in this house for many, many years. It was his grandmother's and is still in her name. No probate ever done. Grandmother had 2 children. His mother had 8 children. So, technically, he never owned more than 1/16th, but it was always seen as Marcus' house by everyone in the family. Nobody argued about it. 

He was giving his sister money every month and she was supposed to pay taxes etc. She didn't. A tax investor bought the house. It's past the redemption period. My friend didn't know until just recently. Now investor is offering to sell the house to Marcus.

Asking price is 40K. Present market value is about 25K. Terms are 9 years @ 9% = $ 488/month. 

And the contract requires Marcus to state that this property is an investment property. 

No, the house isn't worth it, but he'd have a difficult time finding a rental at that price and he knows the house inside out, of course. So, in the big picture it gives him full title and all the other relatives are out, but I'm really concerned about the investment property thing. That would immediately allow the tax investor to foreclose on him, if he found him living in it (which of course he is, and the investor knows). I assume that is being used to get past usuary laws in Georgia. 

What other pitfalls are created, if Marcus agrees that this is investment property?

[Wayne Brooks]

Investor is trying to avoid the lending requirements to owner occupied borrowers, including Dodd Frank.