There is no way you can tell from the information given, but a balance sheet would sure shed some light on it, even if the balance sheet was not 100% accurate.Hard to fudge on what is owed, and if the value is fudged, due diligence would uncover that.

If it needs more repairs or has some fundamental flaw, it will be uninsured.

Do the buyers have any recourse if there is a title flaw?

Typically, in an installment contract/ land contract/ contract for deed (take your pick, all very similar), you will not get the deed until you have paid the contract in full - similar to automobile purchase.So, your reasoning for buying on a "contract sale" seems flawed.

The BP Nation is sure to correct any flaws in my analysis above!

I have not heard of anyone couting a loan approval as a deal, then placing a tenant in same property as a deal and so on like he stated.My recent experience with a few uncovered that they would count the purchase, then the flip as two deals.

He uncovered that they had a guideline that indicated they would not fund an investment property that has been purchased by the seller within the last 12 months.

They are extrapolating futures using flawed data.

However, I can say, if your data set is comprised of actualized closed transactions versus active listings, then I believe your data is flawed or your conclusions are inaccurate I can show you both the ARMLS and the Comford Report for Scottsdale and Mesa support the greater Phoenix data results.

Fundamentally, the business model had flaws though and we didn't have enough cash to sustain our lifestyle and work through the flaws to make it viable long term.