I think I let my ego get the best of me and instead of doing a cash for keys I went straight to court.  

In this case, the seller is still responsible for his original loan, and then Ashish's answer is correct: interest deduction belongs to the seller.Once I re-read the original post by Anirudh, I realized that he left both interpretations possible.

If it is someone you know you can give them a straight return as if its a loan - can provide a lower interest rate to provide upside - it really depends on the lender and what are they concerned with and what is their risk profile. 

Based on the numbers seems like it was a straight forward conventional loan...any challenges?

You can go straight down on one block and straight up around the corner.

Now if your interpretation is cash flowing enough to quit your job that is another conversation.  20 or 30 properties at 1k a month a door, if managed properly is a great revenue mark in my book. 

If you already have the buyer and the seller in agreement, you can probably skip the LOI and go straight to a contract.

The seller responded that since the issue was repaired and he believes there is no ongoing problem, he did not think it needed to be disclosed.When I asked him to extend the inspection period so I could follow up with the repair company and conduct my own inspection, he declined.I disagree with this interpretation.

You won't get a straight answer here since this is a question for a professional that you would normally consult with. 

Never heard of Investor's Edge, but this sounds like a straight up scam.