Is it legal?

Add in principle payments, taxes, insurance, association dues, vacancies, maintenantce, advertising, tenant screening, legal fees, evictions, tenant damage, etc., etc., and you're in the hole several hundred, maybe even close to a thousand a month on that one property.

So, your division into the different percentages may or may not actually pan out.You've missed some items, like advertising, tenant screening, tenant damage, legal fees, cost for a CPA.

It is listed as a 2 bedroom in all the docs erroneously, I have seen it..it is a legal 3 as far as I can tell.

By definition you are signing away your legal rights.

Wheatie,When you refer to the tenant buyer's "claim they have an equitable interest in the property" are you referring to any legal action if the deal goes to pot?

I have seen this idea used in other states, in affect, the seller did not have the legal right to extend financing at the time the note was agreed upon, at least thats how it played out in a deal I saw go through in Arizona.

Is it legal?

If you have a valid contract and he sells it to someone else you would, most likely, have a legal claim against him.

Without either then it will be tough for you represent the home without ownership rights.If you have a contract with the seller then don't worry too much about the buyer, they can't legally take the house from under you, however, they might try.