Buyback Home among particular

[Victor NA]

So I have a dilemma, that I feel it is a good consideration with my neighbor and also good business. I need feedback and the pros/cons that probably I am missing.

My neighbor lost his job and he is selling his house. He is a good guy, he has been here for a while, so I'm thinking of an option I will like to discuss with him that he may be interested.

He already mentioned to me, because he knows I may be interested to buy his house as investment to rent it out.

So I'm thinking I'm buying his house but rent it out to him with the option of buyback so if the time comes better in the future for him, he could buy back his home with preferential option.

I'm thinking in a scenario of paying 50% of the purchase price in cash to him and the other 50% pay to him as loan payment in 5 years. ( Around 1,800/month)

Also, he may pay me 1,800/month per rent, so being nice no increase in this 5 years period, netting total.

So he has for sure a place to stay in the next 5 years and pay only utilities and not paying rent and I don't have to pay him loan ( the other 50% of the transaction).

I have just to assume property taxes and insurance, so losing money at the beginning.

I don't really make cash flow in the first 5 years that he is living in the property unless he can buy back, or he decides to move and I can sell to the market.

Thoughts about the transaction, legal, lender point of view??

Thank you,

Victor