Foreclosure sale could sell at same price as original purchase, but with accrued interest and fees, all LP equity gone.At the end of the day, all LPs loses boil down to an issue with cash flow available and/or a decline in overall values.  

I'm based in Tampa and am happy to connect.I also have family in Chatanoogo and originally from AL, so I can help when it comes to those markets.

It is not uncommon - main reason we see right now is over inflated original ARVs and now borrowers cannot sell and pay off the lender. 

Also would charge points at origination and bump the rate up a point or twoReason being my guess is this borrower can it get conventional financing so they are a higher risk.

The calculation involves:Selling Price: $1,075,000Original Purchase Price: $355,000Depreciation Recapture: $105,300 (taxed at 25%)Capital Gains: Sale price minus original cost, minus depreciation, minus selling costs (~15-20% federal capital gains rate for their income bracket).State Taxes: Since the property is in California, state capital gains taxes will also apply.Given the multiple layers, I’d highly recommend your parents work with both a CPA experienced in real estate and a qualified intermediary for the 1031 if they choose that route.If you need recommendations for professionals in Illinois or California, feel free to ask!

I am originally from PA and still have family there. 

I've had one recent multifamily deal in Florida exit with a 32% IRR and one hotel deal in Atlanta refinance and return 110% of the original invested capital through dividends and the refinance and the hotel continues to make regular 16% distributions.  

You paid 1% origination, closing, legal etc, and 4.5% interest.  

Original, decorated with period antiques and rugs, an old grandfather clock, a river otter taxidermy, and a 80-year-old map of the Great Smoky Mountains above the fireplace. 

He ended up having to sell the home instead of renting it out, which wasn’t part of his original plan.