I think I'm in line and understand all you are saying, but one last question.purchase price was $72K + $40K rehab = $112K all in...If sold for $200K then the gain(profit) is $88Kdo I pay taxes on the$88K or on the entire $200K.

You can have to get another person sold before you close and make payments to you.I am not an Attorney but I think you can do this. 

Everything I've seen sold recently has been at or above a 7% cap.

It's a great tool that lets your learn and work for success.

He agreed that would be possible so he had his attorney draw up paperwork and paid the back taxes and made the loan subject to the house being sold to me.

Original owner would have made a lot more profit if they had simply rented and then sold the RE after the outstanding appreciation. 

I've sold properties to investors using Lima and Ironbridge as well. 

Unless it's sold free and clear, you'll have to pay the back taxes of $16K.2.)

Here are my best three bullets worth of advice:Get and review client references - Talk to the last couple of investors they sold a deal.

Can the owner in this case, deed equitable interest or some other legal instrument to allow myself to actually not only make repairs on the property but only pay the owner after the house is repaired and the house is actually sold?