If I were in our potential lead's shoes, my biggest hesitation would be that these "cash for homes" guys were trying to scam me.  

Sounds like a scam to me, never heard of him around these parts.

Otherwise you're scamming the feds and taking advantage of the FHA program. 

You are trying to scam me because you think I don't know how to use cap rates. 

This is the reason (for most people) college is a scam!!!

Make sure your "due diligence" covers these sort of issues also, as well as ensuring any earnest money is not able to be scammed away from you.

I understand the turnkeys, but part of me feels a disconnect and I don't necessarily understand what my true property price is, or recognize it as a scam.

Definitely more confident in the new housing market then the resale.I am also curious to see how the "ghost lots" scenario plays out, Horizon City was name after the scam company that sold these non livable properties.

I suspect the state will be coming down more stringently on some of these practices due to the number of owners being victimized by these scam artists.

If you do not know what to look for, you will get scammed and some people will not pay you back.