And I'm not interested in selling or having a co-owner.

Plan on developing these into rentals and/or lease options/ owner carry.

You sign a contract that you owner occupy for one year on second home/ or any owner occupied product.

When I have purchased non performing notes I have attempted to contact the owner of the home.

But typically these are already home owners so it may be a better than average tenant base as far thrashing the property. 

The owner (87 years old) passed away at home peacefully.

Or maybe have a squatter coming in on a down week and taking over.Or maybe you like dealing with folks sleeping in your back yard or having a derelict RV on the street in front of your house.I am being a bit hyperbolic of course, but our area isn't owner friendly at all and it is getting worse.

Terms can be whatever the owner makes them / you negotiate3.

Might be a slight consideration for some owners. 

I have had to turn away people that were literally crying/begging on the phone as I turned them down and you feel terrible, but I have a responsibility to the Owner to manage the asset responsibly.