@Chrissy Gray- It sounds like the attorney is setting the father up for failure.   

Any strategy that comes with no money down increases risk of failure. 

It is the equivalent of crashing your car then trying to buy insurance to fix the car after the fact.A home warranty or homeowners insurance policy will not pay for mold because mold is a maintenance issue.You didn't say what is wrong with the garage - if it's a broken door opener that is typically covered on a home warranty.My experience is mixed with home warranties and I can 100% tell you your satisfaction comes down to the local trade person that shows up.The home warranty company does not employ trades - they contract them locally at a fixed rate for the work performed sort of like how car mechanics are paid. 

Default by TenantTenant will be in default (Default) if: (i) Tenant fails to pay any Monthly Rent by 7 days after Monthly Rent is due and does not cure the failure within 7 days of receiving written notice from Landlord; (ii) Tenant fails to pay any Additional Rent by 7 days after the Additional Rent is due and does not cure the failure within 7 days of receiving written notice from Landlord or; (iii) Tenant fails to comply with any other obligation or restriction in this Lease and does not cure the failure within 7 days of receiving written notice from Landlord.

When it comes time to negotiate, the buyer will have his/her opinion on the matter so I’ll be somewhat dependent there, but it’s good to know the tax “mechanics” won’t be an issue and have a few reasonable options.Quote from @Michael Plaks: @Matthew HeffernanTax question first, because it's very easy.

Home insurance won't cover a lot of system failures like electrical.Home warranties are designed to make the warranty provider money; they are slow to respond, quick to reject claims, charge you a trip fee for every visit, use the lowest-cost vendors that provide quick-fix solutions, and are generally not worth the paper they are written on.

@Tom Gimer since I know you have a background in law, and Account Closed since I know you have defended a creative transaction of yours in court...To me this discussion of Morby method only sounds ok from the perspective of 'mechanics of a transaction'.

After mortgage and mechanic lien(which was inflated)I cleared 230k on that sale but i had 7 other loans with liens on most of them.

The title company did a search and found out the sellers haven't passed a electrical and mechanical inspections and owed money to the county for delays.

But I have seen at least 4 spectacular failures in the last 5 years as well.