@ronflatt Thanks for the immediate feedback, a sheriffs deed auction sounds a lot more safe and less risky, but I have heard about buying redemption rights to alleviate the 2 yr. wait for homestead properties during tax deed sales, have you?

Often, it involves criminal activity like using it as a drug house. 

So in other words you will probably be dealing with low income deadbeat tenants, probably a few drug dealers, a break in here and there, all in all a rental house that will be rode hard and put back wet.#2 Tax appraisal and Zillow are not good tools for judging the value of the property.From a straight cashflow standpoint the numbers may look good, but just remember you will have some pretty high expenses with a rental like this.

. :) If drugs are talking and/or the property is being used as a home base for selling or other illegal activities?

Look for drug references and other nefarious behavior 

Homeowner said he rented it to a drug addict and a college student and didn't get paid for one year.

That's not even factoring in the large numbers of persons with violent felonies and drug histories that would be "challenged" in finding employment in any situation.Now there are these things called renaissance zones, or at least there were when I lived in Metro Detroit.

The first one was a drug addict, who turned the apartment into a drug house.

I will not advertise the name yet, I need advice from the community on how I can validate this supposed-lender and if I should put the name out there to alert the actual person; granted my concerns are valid.The person in question is not part of the BP community, I looked, but I was hoping that someone knows this person and may be able to assist me with this probable issue or at least alleviate my concerns and validate that this supposed private lender is legitimate.  

There are parts, where one street separates you from 200k+ houses and on the other side are 40k war zone/drug infested areas.