Turns out for me it just tied up a small portion of my proceeds until next tax year.

Like I said earlier, if I’m not booked a few weeks out, forget it - the whole house remains empty & the expenses pile up

If they give you more than 30K, they can simply deduct the remaining amount from their lifetime gift exemption.

What would push you over 100k, most likely, is rolling the purchase into the HML.Conventional wisdom says buy the property and then fund the rehab, but you can have less of your money tied up in the deal if you roll both in and then refinance accordingly.

If they remain in jail for an extended period of time, then you are better off evicting for failure to pay rent.Unless the charges are serious enough that they impact the safety and security of your other tenants or your buildings, I would not even worry about it. 

Equity % will be important but since that mortgage remains in 1st position this should be possible to do...as long as the "subject to" deal was structured properly sort of thing. 

They are somewhat liquid for a year unless you sell the lien so your money will by tied up for a year. 

The upside of doing this is that servicer will take your payment, pay out the underlying mortgage, and then pay the son any remaining balance every month.

The home was previously a foreclosure so she got it at a really good price ($440K) and has $429K remaining on the loan. 

You would have lost all of that cash flow in the meantime, and would have actually lost money due to inflation and your money just sitting there.Second, why would you assume that interest rates are going to remain the same during the downturn?