There was also two months of vacancies that I could've avoided.  

My guess is that corelogic was working for the first mortgage holder and found that the taxes were delinquent so they paid them in order to avoid a tax sale.

I'd recommend against the 3.5% with PMI if you can avoid it..

Note to self: Avoid applicants who have their own attorneys "on retainer". 

Thanks Again for all the help and warnings, avoiding a deal you should not do is  as important finding the one you should!

Being in the trades which can be very sensitive to the economy, I'm want to avoid getting too leveraged. 

There are other concerns too though besides "wouldn't it be cool to do this, avoid some taxes, and use this pot of money I inherited" such as valuation and liquidity.

If the unit mix is all studios and 1 bedroom, I avoid them like the plague.  

You are banking on appreciation. 2nd, personally, I would avoid properties with HOA's.

Richard, i think that is a great thing to do for your parents and is a good plan. if you have any siblings, just make sure you get everything in writing about the deal and that you will pay off the debt in the mean time and that it will be yours, just to avoid any future arguments.