@David Hannah Purchase Price (-$102,082.00) Purchase Closing Costs ($175,000.00) Total ($72,918.00)according to this, the seller is paying you 102k to take the property, and your closing costs are more than the price of a house in half the country.

Obviously way harder to get owners to get on board if you make them change their insurance but its the route I took in Colorado.  

Someone is going to be paying a good chunk of your mortgage (indirectly since they pay you, not the lender obviously).

Most of them exist to take your “membership fee” or other large upfront fees totaling thousands of dollars.

from total strangers that know nothing about you.Well, are you 30 pounds over-weight or 300?

So essentially in about 8.5 years I’d have both units totally paid off and in the clear.

This would require some demo work and I would not be able to get as high of a rent obviously and it would reduce my ROI. 

Totally renovating the 2 family home into two condos.

Obviously there is a lot of factors left out of this (will bank approve, you name another etc) but just from a theoretical standpoint is what I proposed (using tenants $300K down payment as a down payment for my traditional loan) illegal or just not feasible and I've completely missed something here that more experienced people can explain to me when they are done having their chuckle.  

Be sure to also determine the total expense of foreclosing if she can't refinance in time.