NPN 1st-3 Year Balloon--Due 1/2012--Note Not Enforced

[John Thedford]

Hello all:
Got a potential note seller wanting to sell one under these circumstances:
Approx 74K face value
7% interest
Balloon due 1.1.2012
Note holder has not called note.
FMV of RE securing note is approx. 80K.
Asking 70K.

I believe his asking price is quite optimistic considering the circumstances. If purchased, note holder would probably be forced to file foreclosure. I don't see any upside for an investor under these terms. Would it make sense to offer 50K? What would experienced investors do? Thanks all!