However, the devil is in the details, of course.

I would look into their contracts in details.

Problem is, 10% down doesn't pay off our home equity loan.I tracked the buyer down and called him, and we sort of agree in principle on a deal, but the details are still fuzzy.

Buy something.There's 1000+ details omitted there for brevity, but to your question about "legal steps in terms of financing" that's the general answer. 

@Kole Kingslien, about a year ago, I purchased a 4-plex with asbestos siding using a 203k loan, so here’s what I experienced...The asbestos siding (at least mine) is not dangerous to health, like many people believe the insulation. 

It's simple: He complies with the payment dates and method detailed in the lease or you move to evict him.

Details:1.

@Ivan Barratt - you are to blame for my descent into the K-1 details as you showed me just how little I knew about the topic but how critically important such knowledge is! 

Thank you for clarifying the details on a multi-family property.  

Without knowing all of the details, my initial suggestion would be to invest there close to home and here is why.You ask two things.