They may decide to buy a house or get a job of high enough quality that they do a background check on them and they need to get the judgment released in order to qualify.  

Well, just to start, you are the one buying it not them. 

Typically closing costs are around 1.5-3% of the purchase price depending on buy down points, tax proration, etc.

Do I personally buy cashflow negative rentals?

My mom keeps hers at 68 due to health reasons so I figured give people an extra degree. 

However city is imposing a good amount ofimpact fees based on the bedroom count - which accounts to close to $40 k , which i cannot afford- Ibought the house for myself to reside and cannot afford to pay this.We verified with city prior to buying and theyconfirmed it is residential zoned , however never mentioned about any impactfees.It is residential zone - MLS shows it as 3 bedroom 2baths - it had a extra unit  in the back and also a inbuilt rolling bed on 1st floor for the main I am stuck here- they are asking to prove it was usedas a residential -ever - any guidance would be appreciated on this.

If it’s worth more you owe him that much money to “buy it” if you really want to keep it “win-win”2) HOW IN THE WORLD!  

@Austin Kaercher What ever you do don't be in a rush to buy property.

I have been mainly a buy and hold investor till now.

Save your money and make plans for bigger buys.