Hi Austin, Sub2 = you get the deed, you pay PITI, give your word, the promise to pay is not legally binding, it is a moral promise, loan can be called if payment is not paid or mortgage co finds out title has been changed, you own it and can resell it for cash or rent it out or lease to own.Wrap = you get ownership but not a Warranty Deed, It is called a AITD or all inclusive trust deed or mortgage, you pay PITI, directly to seller or note servicing co, loan can be called if payment is not paid or mortgage co finds out title has been changed, you own it and can resell it for cash or rent it out or lease to own.I always do not plan to own a sub2 or wrap long.5 year Private Lender Mortgages for long term hold and rents.There have been promoters of sub2 and exit on a wrap, or wrap and wrap again (double wrap) , I would NEVER do that.You need a GREAT attorney.

Since the owner is in a bind, you're reaching out to help keep the house from being taken back by the bank.  

I tried the hardmoney lenders, which put me in a bind and where I learned lesson 2 of when real estate investing 101 goes wrong.

If you want to help them, consider doing it in a way that doesn't jeopardize your investment: offer to pay their moving expenses, provide their security deposit, or gift them a months rent for their next property, Aside from that, I think something you may need to be weary of is the possibility that the seller gave you an owner-financed property at a 20+ cap because he, too, has been put in a bind by these tenants; and likely could have even known that you were inheriting an essentially built-in problem. 

Parents are usually unwilling to let their college-kid start off with a big fat strike to begin with, so rent is paid regularly and on-time. 

Hey @Marci SteinI definitely recommend you speak with an attorney if the situation calls for it, as I am not a lawyer, nor should this be considered legal advice.With that said, it is my understanding that your lease likely falls within the limitations of the Statute of Frauds and, as such, would technically require a written, fully-executed agreement between both parties in order to make binding modifications to the terms.Personally, I wouldn't stand for someone trying to pull a fast one on me like that.

They're not widely enforced, but they are legally binding.    

That's what tends to make it tricky, since now you're not only asking for a large sum of money to assist in the purchase, but also a potentially legally binding agreement that states you have no duty to repay.So, a HELOC/funds from a cash out refi or borrowing against your 401K will likely be much more feasible.

The background checks and facilitated the transfer of funds, keys and created contract language that binds the applicants into a year lease with the landlord.They did their job, as we did ours.

Many landlords believe that a contract is a binding agreement and enforceable in court without bothering to learn their landlord tenant regulations.