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

I'm doing equity, tax delinquent and pre-foreclosures. 

Hi Pete, I was in a similar position a few years back.

You essentially trade equity for cash that most be repaid over the course of your new loan.Here's an example I found on Bankrate.com: "Let's say you still owe $80,000 on a $150,000 house, and you want a lower interest rate.

The advantage of the 5% downpayment over the FHA option is the PMI that would be on both loans, automatically falls off of the conventional loan once you reach about 20% equity in the property.  

@Kareem Elshatory they can def be a little tricky when the clock is ticking, but it also helps put the seller in a more vulnerable position when it comes to your offer.