So that entire scenario you just described would never happen. 

Just before posting my message, I had filled out a form to contact a real estate lawyer that handles landlord/tenant issues so I'll definitely sit down with them as soon as possible and add on specifically what you describe to see if that is legal and if it is advisable for the state of AZ.

When you get to that point feel free to DM me and we can talk directly.The type of financial structure you describe in the second part of your post is called BRRRR.

We've done a few medium size commercial buildings like what your describing here in NJ. 

Jennifer, what you described is considered a "prohibited transaction" by the IRS because of your personal involvement, can't do it!

You've just described my favorite seller.He most likely doesn't have post 1997 depreciation, so no recapture. 

This section prescribes rules for tracing debt proceeds to specific expenditures.Treas Reg §1.163-8T(a)(4)Treatment of interest expense(i)General ruleExcept as otherwise provided in paragraph (m) of this section (relating to limitations on interest expense other than the passive loss and nonbusiness interest limitations), interest expense allocated under the rules of this section is treated in the following manner:(A) Interest expense allocated to a trade or business expenditure (as defined in paragraph (b)(7) of this section) is taken into account under section 163(h)(2)(A);(B) Interest expense allocated to a passive activity expenditure (as defined in paragraph (b)(4) of this section) or a former passive activity expenditure (as defined in paragraph (b)(2) of this section) is taken into account for purposes of section 469 in determining the income or loss from the activity to which such expenditure relates;(C) Interest expense allocated to an investment expenditure (as defined in paragraph (b)(3) of this section) is treated for purposes of section 163(d) as investment interest;(D) Interest expense allocated to a personal expenditure (as defined in paragraph (b)(5) of this section) is treated for purposes of section 163(h) as personal interest; and(E) Interest expense allocated to a portfolio expenditure (as defined in paragraph (b)(6) of this section) is treated for purposes of section 469(e)(2)(B)(ii) as interest expense described in section 469(e)(1)(A)(i)(III).Treas Reg §1.163-8T(c)(4)Allocation of debt; proceeds deposited in borrower's account(i)Treatment of depositFor purposes of this section, a deposit of debt proceeds in an account is treated as an investment expenditure, and amounts held in an account (whether or not interest bearing) are treated as property held for investment.

@Daniel Sutton describes another method I have seen used to tie up a person's property, however that method also comes with risks, as you are essentially putting a cloud on the Seller's title.

Both of these areas sound like what you're describing.

@Justin KlepferLook for lawyers who specifically mention estate planning, small business, and real estate in describing their experience.