I will take your word and assume this is a legit sale.

They are only willing to finance a small amount as they say the money down they need to cover the taxes owed from recapturing all the depriciation over the years.What are the rules on recapturing depriciation when a seller wants to owner finance the sale? 

You could make the sale contingent on the two POHs having a title.

. $275,000 with an end sale of $390-420,000 doesn't sound like a break even to me.

Has a taker, rakes in the option fee, the extra rent, and IF the house sells, the difference is sales price.

The obvious answer is flipping.Basically they buy a property needing a lot of work, they put a lot of money into it, then they list it for sale.

The house was also facing sheriff's sale and we had to file some court documents and get it postponed.  

I am on List Source trying to gather my numbers for certain zipcodes in my farm area such as how many SFH, Equity, OO, REO etc and I can not seem to find how to check for " total cash sales in the last 6 months to a year". 

Quotes may not include sales tax.. 

They do not need to be capitalized, depreciated through a cost segregation study, and then depreciation recapture taxes paid at sale of the property.