Follow up on the final outcome-Seller doubtfully would have breached the contract in the end...he is a contractor/investor and just plays hard. 

This option also serves as a benefit to the lender (and potentially the broker) because origination is based on the total loan amount.

I am starting from ground zero, with no prior background or capital to invest, but with a strong desire to create passive income for my family.I currently work as a middle school teacher in California, and while I love my profession, I have a strong desire to explore avenues that could potentially provide financial stability and additional income streams.

I'm sure I missed a lot of potential pitfuls, but does anyone think this kind of idea might have legs in the right market?

@Blake Sanford  Blake - what happened with this potential deal?

Depending on the demand in your area, this could potentially generate enough income to cover a portion of your mortgage payment.Negotiate with your lender: It's worth reaching out to your lender to see if there are any options for restructuring your loan or modifying your payment plan to lower your monthly payment.

But this makes the mortgage payment higher and potentially limits cash flow or puts you negative.  

Having the right insurance coverage/riders is critical - if you're not properly insured and something happens, the asset could potentially be wiped out.

Moreover, our spacious yard, characteristic of our corner property, contributed to minimizing any potential disturbances.

Would the potential rental income count towards offsetting the mortgage?