Free Gorgeous Home With A Catch... What Do I Do?

[Paul Ivnitskiy]

I have a unique opportunity to live in the in-law apartment of a beautiful colonial house, for free, for 24-30 months.

The 'catch,' however, is that I need to 'buy' the house, at a price that is 20% below market value. The seller will cover all down payment, closing costs, etc -- so I will not have to invest anything out-of-pocket.

He will then rent the house back from me, with the option to buy it back within 24-30 months.

All I need to do is qualify for a mortgage of 550k. 

How would I go about analyzing something like this? Is this a bad or good idea? 

Thanks for the help