In that time, hopefully the HOA issue for the community can get resolved, but it is bound to bring down the property values of all the homes in the community in the near future to below market rates.

I will try to find a probate/real estate attorney to see how we can structure it without much risk of loosing the money I lend to the heirs.

With any investment, you will loose some of your freedom and create some issues that need to be attended to, it is not retirement unless you enjoy the business.Just my 2 cents.

Force the appraisal by way of Lender Commitment time frames and on properties you are worried about ride the crap out of it to get it done and in so you loose the least amount of time possible.Some ways to get ideas of how to have better contracts, take a look at the contracts from the foreclosed REO in your area.

Yes, it's negative, but it's far more negative then you described when you start adding in repairs, vacancies, legal issues, etc etc etc that are bound to happen long term.

Also, the bank doesn't want you to pay it off because they loose all the interest.

The loose their option fee in the process ... but paying 196K is still less than $202K.

Could you imagine loosing your home because of a fluctuation in the economy?

Plus, you need a huge down payment to make up for loosing the long term interest in the property as well as offsetting the capital gains taxes and subsequent taxes from the payments....and you have to deal with escrow and those costs.

And yes if properties here are vacant they will most likely loose the copper plumbing and copper electric wire.