There are all sorts of worse case scenarios I can create in my mind to not make a commitment. 

:)thx all of you who've helped give your time and advice. what i realize now is just how hot our market is here in asheville, which makes finding anything that even comes close to passing the 2% rule very difficult, or just about impossible unless i can find a truly motivated seller. i've noticed on zillow that country records will state when a home is in default. i'm sure there's a lag time there. is there a way to get this information faster?

In my purchase contract does it have to say purchase for $9k that way the back taxes get paid or could I leave it at $8k for which is our agreed price And have the title company sort this out?

Something to keep the contractor motivated would be a bonus of x% upon completion by a certain date.

That said, pledging loans is sort of how our finance system works.The structure of a pledge can take on a variety of forms.  

There are ulterior motives behind this credit report request as well.

Ok.. a motivated seller called today. his house is worth maybe 175k.

When a potential client of mine says "bring me a deal" it sort of screams "I'm new to investing and I have no idea what I am doing."

Between him and I, you'll be able to get all sorts of information on both the west side and east side of town.

In some locations, this sort of lease back arrangement has ended up in front of a judge, with the judge ruling the transaction to be a loan in disguise.