It was a simpler transaction because it was free and clear.

Not really, I thought you said you were a nerd, LOL, weighted averages of interest rate as a % of the amount used in the total amounts financed, 60% @ 9.5%, 40% @ 9.00 = 9.30% (I think if I remembered the last factor, lol)Not sure you are understanding the concepts to apply, it is a finance/economic nerd subject, I'm still having coffee too.I suggest folks take the time to study finance and economic theory as to the applicability of financial ratios before using or applying them based on definitions of any one ratio.

But now I am fully embracing the concept and looking to do as much as I can coupled with real estate investing.

In concept it is legal as long as you meet permitting and code regulations.

Situation - We own condo (we paid 50k cash 2 years ago and have rented)MIL is moving into the condo.Mother in Law has about 60k in cash from sale of her house and 30k 401k, and she gets 2k per month SS.Her health is realtively poor.We are open to helping her financially some, but also want to protect her as she is not finacially super wise (She was recently ready to give a hospital a large amount of money because they said the insurance hadn't paid yet)My wife is her only heir.Option # 1 - Rent to her.. fair market is about 600 month.Pros - Simpler, no Title Insurance, She has plenty of cash left to live on, Option # 2 - Sell to her for about 65k.

I've never paid any attention to a program/commercial/pitch that touted getting rich in real estate so I didn't even know that what many of these "gurus" were pushing was the wholesaling concept.

Lastly, in terms of the bigger concepts to address, with being what seems to be likely pretty far behind on payments, there may back taxes due, which will also affect your security and/or no homeowner's insurance, which adds more demands on an already tapped out borrower and also could affect your repayment.In my opinion, being pretty new to REI, I would suggest you avoid this situation.

@John Chapman I realize that Texas is pretty LL friendly but it's a pretty universal concept that turning off the utilities (even if the lease says it's their responsibility) is a self help eviction in which case the LL loses.

The concept confuses me.  

I do appreciate the concept of the first-time FHA homebuyer needing to qualify for financing.