Move into a new house (your 2nd house) but keep the first and now you are a landlord and a bona fide investor.

-If you are a bona fide real estate professional under Internal Revenue Code section 469 et seq, then these loss limitation rules don't apply, and your losses are fully deductible in the year in which they occur.Hope that helps.

"Grantee herein shall be prohibited from conveying captioned property to a bona-fide purchaser for value for a sales price of greater than 120% of the purchase price for a period of 3 months from the date of this deed.Grantee shall also be prohibited from encumbering subject property with a security interest in the principal amount of greater than 120% of the purchase price for a period of 3 months from the date of this deed.These restrictions shall run with the land and are not personal to grantee.

But, the not to exceed is also tied to proof of a bona fide offer to pay $1,000 more than the highest offer, not to exceed.....I won!

Rather, it merely requires the owner, when and if it decides to sell, to offer the property first to the holder, usually at the price and on the other terms and conditions set forth in the third party’s bona fide offer.However, as noted above, the right “ripens” into an option upon notice to the holder of the grantor’s receipt of a bona fide offer and decision to accept it.Fixed-price first-refusal rights often are unreasonable restraints on alienation.

A bona fide buyer will run the numbers and will establish their expectations on the financials stated in the offer.WOW, you say, what a way to loose a sale? 

We also assumed renovation costs of $10,000, without actually getting a bona fide contractor estimate. 

Phase I alone is going to run at least a few thousand bucks and he has to get one in order to be a bona fide prospective purchaser under CERCLA.EDIT: Guess I should add a caveat that it sounds like the friend is just buying from someone who already developed the site.

It's unfortunate, IMHO.And yes, there's an investment element in a bona fide corporation.

The only recourse you have at this point is to come up with the full reinstatement amount, or have a bona fide sales contract to sell the property prior to the foreclosure date.