I am not a big fan of that program as you are limited to what you can do to the house by the equity spread from purchase, rehab and refi.  

@Josh Pass if you have approx $200,000 of equity in your home how is there not enough money in a HELOC? 

That Pay Off number, and that alone, is what tells you if there is equity, or if it needs to be a short sale.

Hi everyone, I found a pre-foreclosure deal with some equity.

Determine equity when they call in.Right @Rodney Kuhl ?

You're trading equity and cashflow for the security of having a paying tenant already in place. 

The property is directly beside the elementary school as a positive.

.- I would get a lender's title insurance policy to make sure you are indeed in first position and the person/entity you are lending to is the owner.- Borrower pays all closing costs, usually subtracted from loan proceeds upfront.- Make sure the interest plus points doesn't exceed usury in your state, I don't know what it is in Florida.

Sounds to me like the neighbor has a "dream" of buying the house but isn't in a position to do it now. 

Duplex with positive cash flow. 1st property ........Thanks,Joan