The cost of the program is 35K upfront and then approximately $3500/mo for all marketing.

In this instance what I would do is get the deed in lieu from the borrower so you ahve the property again and get a note from them but have an attorney draft it to see if you can include a confession of judgment - meaning if they do not pay then you can get a quick judgment and possibly garnish wages.I would also have them put a small down payment as part of the note and only accept a check that way if you ever did garnish you have a copy of a check so you know where they bank.unfortunately you are right they can stop paying on the note and its unsecured so its a risk but out of all the options this is your best option.

Then the seller is holding a note for 5 years.

I use the data to target specific area and then send out direct mail those area.

Please use an attorney to write these documents - this is the equivalent of going to see a dentist in the van down by the river - it's great until something goes wrong and then you could be completely screwed 

When you start selling listings and making money, then you can think about investing in a dialer or other tools.  

City won't let you rent out basement, but owner can live in basement.It may suck for 1-2 years, but then you'll have gained so much knowledge you can do better on the next one!

It would be a shame to convert it, and then down the road they tell you that you have to change it back.  

But if you still want it, then boom.

Then check off all the things you need to do to buy a property and get them done (get preapproved, find an agent, contractor, etc.)