You seem to be focused on cash flow based on the emphasis placed on the 10 Cap in your pos but you also describe the neighborhood as "shady" which I interpret to be a lower barrier/ at best "C" neighborhood.

@Ryan Parsleywhat you're describing is basically a BRRRR. 

I know some people like what I am going to describe as "whiz-bang" webtools. 

@Mike DymskiWhat I described is not what led to the lawsuit.  

First though, I am not an attorney and this is not legal advice.In my opinion, what you are describing is illegal and I always would suggest to stay away of skirting any laws/rules.

Given the fact that I described that I was already an investor in RE, showed cash available and completed all information requests as asked, one would be hard-pressed to see me as a non-qualified prospect. 

Wrap around and down describe a sale now. 

What you've described is the sweet spot, where one spouse is able to meet the requirements as real estate professional and the other has a W-2 salary.

Your transaction is suspicious by nature the way you describe it.

The "rocking" you describe I am assuming is back and forth.