Let's say a tenant has a small leak under the sink and because they don't want to pay your deductible they just put some duct tape on it and ignore it. 

Let's say a homeowner has listed their home with a real estate broker.  

I used this concept many times by offering 3 price ranges of say a possible home I was rehabbing  and the end buyer most of the time bought in the middle even though before they were basically set on the lower price version of the rehab before.

It accepts what you say as the truth.The most amazing thing about "Law of Attraction" The entire planet agrees on how it works and it's existence.

Lets just say a cash buy of 55K, home has a FMV of 95K and a tax appraisal of 118K. 

I would say as long as you can run a SWOT analysis and understand finance those are the main skills I can think of.

Family might be a little more lenient than say a hard money lender but that's where family relationships get a bad wrap.

A sub-2 could be a better way to go, then again, it might not be, no one here can say as we don't know the details. :)

The neighbors sound like they will not sign an affidavit with the police that they saw him breaking and entering the property.The police generally will not act on here say as it is not concrete enough and does not give them a paper trail to fall back on if things go South.No legal advice

I'd say as long as there is a timeline and endpoint for the negative cashflow known ahead of time, it's appears to be a reasonable strategy.