I know many areas that is considered an arrangement  but I have not been able to find anything specific to how Iowa courts view this.   

Personally, I'd try and get my housing expenses down to nothing but that could be a function of the market I am in - Chicago.I hope that helped!

he mentioned the court has to approve the sale and up until its approved someone else can come in and purchase the property.

If you love horror stories you will love this :).  2 exterior walls (brick facade) need to be torn down and completely rebuilt, hanging asbestos abated, 6 units were vacant or abandoned (this was suppose to be a fully functioning apartment), ventilation fan in bathrooms are shoulder height IN SHOWER WALL and not on gfci.  

I try to accommodate a tenants schedule but when they put me off, generally due to a pet they do not want to cage, I throw it back in their court.  

Ask the seller - mortgagorSearch on IUrealistGo to the court house - do the search yourselfMake an offer subject to disclosure of the existing liensMake an offer subject to existing mortgages on an owner wrap financing

But then she decides instead of paying me the rent, she wants to have the court hold it until the issue is fixed.

(Like using the fact that your car insurer will raise your rate $1500 to get out of the court reporting you little $150 traffic ticket -- yes that's from experience!

Or, if I purchase another property under my own name and then transfer it to an LLC, the lines between personal finances and business finances wouldn't hold up in court anyway.

I just bought a house in Ohio at auction the owner does not live there. and based on the court cases and back water bill I would say the tenant probably has not been paying rent.