I would like your opinions on whether a condo owned by a friend on mine is a bad investment or not. A friend of mine bought a three bedroom condominium in Laguna Niguel in Orange County a few miles from the ocean about five years ago for $490,000. Since the beginning he has only paid the interest and taxes on the place and none of the principal because he cannot afford anymore than the interest and taxes. Because he could not make the payments a few years ago the lender reduced the interest rate to just under 4% and extended the mortgage from thirty years to forty. The current payment, both interest and taxes, is $2600 per month. The condo also dropped in value when the bubble bursted by how much I don