If you buy a property from a landlord who desperate to sell and you lack the experience and the knowledge to turn it into a successful venture, you bound to find yourself at the same predicament that the seller is in at the time of the purchase.

I'm not looking for a moral loophole to leap through here... if they're not a good idea, they're not a good idea.

Morale of story.

Most of the time you can make it work if your with someone who is in the same predicament.

Putting asside the moral aspects of this transaction, I would think a "Joint Venture Agreement" would be your best bet.

The problem with short sales if you are solvent is the bank asks for a bunch of financials and assets.If they deny the short sale their attorneys now have a bunch of disclosed assets to pursue that may or may not have been easy to find.You will see this on short sales.Owner applies and only sends in certain documents or banks ask for more documents.Seller that is solvent says no way am I giving you that info and just foreclose.So in those cases sometimes it's better to not give financials and just let it go.He could just keep the cash flow payment and not pay the mortgage until it forecloses.Many do that today and it happens with commercial real estate as well.I am not going to debate morality as that is different from the law.Just saying what goes on in the real world.

He has been renting it out for the past 10 years, no problems with keeping it filled or anything like that.Here's his predicament, he bought it roughly 156,000 and recently had it appraised at 165,000.

Moral of the story: Always get rid of bad debt FIRST, and QUICKLY!

@Courtney Fletcher  They don't send a "scout" to drive by and make sure you're living there :) the criteria is that you purchase the house "with the intent to live there yourself" It's sort of a moral thing. 

Moral of the story: Learn the ropes before you rush in and write a check.Day 1: Got a lead for a note secured by a "1st Trust deed" (at least that was the claim by the buyer)Contacted the seller, and informed them I was a serious buyer & requested a copy of the note.