The method described above works, its how our company president grew his portfolio to almost 600+ units.

I have one quote so far, but the offer you describe beats it by a large margin.

I just got off the phone with her and explained almost all of what you described.

Might be a Sub2 deal, but I dont really see much motivation for that the way you describe things.If it is indeed a HELOC at $180k you're right, renting it out would create some cash flow but you're going to have to figure out how to get her the new place and pay for it.Also, I'm with Steven, why not just sell it? 

From what you describe, if you can't find a leak and can't reproduce it, If its under the kitchen, I would suspect the kitchen sink overflowed, we have had this happen.

If it were only that simple....Trustee sales "lists" contain property with the attributes you describe.

Unless you feel like you can get it rented at the high end of that $1800-2300 range, given the circumstances you just described, you might have some trouble making the unit cashflow positive when you factor in management costs, maintenance, capex, etc. 

The way it was described is this is an insurance plan that you can buy that after 6-7 years of premium payments you can borrow against it and invest, with the profits being tax-free! 

@Kelly Foydl  of all that you describe the NPN is by far the most hands on.. and in my mind more of an advanced strategy and one that needs to be done with scale.I for one after many years at this am not looking to buy into some persons problem loan and deal with that drama...

I did what you just described 2 years ago in the Bay Area, bought in cash and the refinanced in less than a year.