The court will look past the what the name of the agreement implies to how it was supposed to work and if it quacks like a mortgage they will treat it as such.  

They probably have no formal lease but it's implied by the fact that he's most likely been there a while.  

Tax savings (at your implied income of $300+K a year this won't matter)... appreciation... something else?

Sometimes when browsing houses for sale, I'll see the term "legal duplex," which would obviously seem to imply that there is such a thing as an illegal duplex.

Your signature implies you might be doing some things in IN rather than OR.

To pay an unlicensed person is to imply a license is not required.As this person is not a principal to the deal they are SOL if you want to retain your license.2.

Doing so after the fact is not technically kosher and can still be a valid basis for a complaint against her license.Just the way you are describing it implies that she is on the wrong side of the line.

While they have a number of foreclosures the mix of loans implies they were a pretty normal lender but not a bank.There could be some points to be scored so a deal might be done.

I actually use the stuff he teaches on alot of my consulting gigs, my clients range from personal trainers, massage therapists to a couple real estate investors (care to guess how I got into REI?).

You need to think 10X bigger (basically implying to discount the risk).I believe in calculated leverage.