Anything illegal in this scheme?

[Ivan Jouikov]

Long story short:

- This guy, call him "Yao", bought a house for $400k a few years ago
- For whatever reason he wants to get out from under the mortgage but he's been making all his payments. His credit history is bad.
- My mentor put me in touch with him.
- Yao wants to do a short sale on the place, clean it up, and re-sell it for more. The idea is, I buy it from bank at $200k and resell for maybe 330k. Comps are 350k easy.
-Yao offered me 10% of the profits
-Yao's realtor already has the place listed for $350k, and they've had multiple offers, but they're withholding that information from the bank. They want me to make a $200k offer, which they will present to the bank.
- I will carry the mortgage and a lot of risk, but is there anything illegal in this setup?

Thanks