Just because a technique for acquiring or earning money is popularized by gurus and practiced unethically by the gurus students does not mean that the technique itself is a scam, unethical, immoral, or that the participants aren’t honest.   

Assume a couple of months of vacancy, consider potential unexpected repairs (like HVAC or plumbing issues), and test the numbers with rents dropping by 10-15%.

During those 10 days, if they find issues they want repaired, compensated for, its negotiated.

The buyer got an affordable home in exchange for doing the repairs himself (sweat equity), I got a cashflowing note, and my private lender got a steady interest payment.

They didn’t completely destroy the house, I did keep most of their security deposit and used it for the repairs, along with some of our own cash.

It sounds like there are a lot of techniqualities to this I will be studying on. 

I doubt it would qualify for a conventional loan with the repairs that need to be completed.

I am a buyer - my buy box is 200k ARV, all in $150k after repairs, rents for $2000 per month.

Penalties of these Federal charges may include:30 years in prisonUp to $1 million in finesIt's a Federal crime.I'm not currently at foreclosure, but am recently out of state starting grad school, no income, and home needs repairs that I simply do not have the money to make.

If you can rent 3 units for $2,000 you are close to breakeven.On the plus side, you will have a highly attractive asset and several decades without much cost of capex and repairs.