A deficiency judgement could be rendered so I would stay away.

Need more detail to be able to render an opinion 

After reading your deal, my question would be how informed is the seller and does the seller have mental or other medical issues that would render them incompetent to do any business dealings at all? 

“To require Tenants to endure the inspections before challenging the inspection requirement would render Tenants’ Article I, Section 8 privacy rights illusory,” the Court declared.

If the dwelling unit or premises are damaged or destroyed by fire or casualty to an extent that enjoyment of the dwelling unit is substantially impaired, the resident may:(1) Vacate the premises and notify the owner in writing within seven days thereafter of his intention to terminate the rental agreement, in which case the rental agreement terminates as of the date of vacating; or 29(2) If continued occupancy is lawful, vacate any part of the dwelling unit rendered unusable by the fire or casualty, in which case the resident’s liability for rent is reduced in proportion to the diminution in the fair rental value of the dwelling unit.B.

In instances where a buyer is financing 100% of the purchase price, and plans to hold the property only a short time, or won’t be paying down the mortgage, an owners policy may not be needed.After almost 40 years in the real estate industry, I can tell you that there are exceptions that render every blanket statement incorrect, or at least incomplete.

I need an architect to draw up renderings.

I was never in the house but drove by a couple days later after the water receded and it looked the river probably reached the house and maybe the road which would probably render any wall useless at that time.

But wouldn't that in and of itself render the original expenditure a loan, which itself is a prohibited transaction?

This may render your mortgage interest deduction useless - both existing and refi interest.