Is there a name for this investment strategy?

[Jack Plantin]

I'm in the process of searching for properties to house-hack with a low down payment (FHA). An investor acquaintance of mine introduced this idea to me today:

1. He buys a foreclosed property and finances rehab with cash

2. I buy it off market for 10k under appraised value with owner financing, because I'm a guaranteed buyer. (I think this is what he said).

3. I find tenants and house-hack it.

There are probably some steps/details I missed, but hope you guys get the jist.

Pros/cons?

Is he trying to take advantage of me or is there really value to be had on both sides?