I GUARANTEE the IRS considers loan pay down as income and US citizens darn well better be paying income tax on it. 

Do that for 25 plus years and you’re almost guaranteed to be rich.

As a GP I'm not sure how much you will personally be investing, but a waterfall structure with hurdles would be your best bet as it would insure you passives a solid return while guaranteeing performance on your part.

The problem your friend faces is that a lot of traditional lenders won't work with borrowers towards a loan modification unless they are already not paying and then it's not guaranteed that they will anyway.

I know there's no guarantee I will win the house at auction, and I'd like to keep them from losing the house altogether.

In an assignment both parties will see how much you are making and I guarantee one or both will balk.

It's not guaranteed, but it would be nice not to have worry about my or my employees safety and security.

It's no guarantee but it's a good place to start.

They even guarantee rent and to have a tenant!

@David Woz whenever there is a thread like this about a property manager, guaranteed over half the people automatically say "fire them" - no matter what the details.