This has to be a doozy of an idea: Is this even Legal?

[Cecil Russell]

2 properties for sale in the same neighborhood. 1 is 45,000 the other is 49,000. Tax assessment of both is 10,000 lower that the asking price. The offer made is: He, (the owner) will sell both for &5,000  cash and co-sign a loan for 80,000. After receiving the loan, I give the owner $75,000 and he pays closing. The  extra 5,000 is for general expenses and emergency repairs. Once the transfer of title is complete, I put both houses on the note as collateral and release the home-owner-co-signer. Is that even legal?