If the property is "free and clear" and the seller does seller finance, a mortgage is created by an attorney & the buyer makes payments to the seller and the buyer gets the tax write offs.

Owning these free and clear make you a juicy target in the case of a lawsuit.

personally I would pay off my home first. that would still leave you plenty to invest. it would provide more security because your home is free and clear. 

Insurance companies all have different names for these, so make it extremely clear to your agent what you are doing. 

I too would get an extension on the escrow and my contingencies and hold off on inspection until you have green light.If the seller is getting sued and it is moving forward there is a good chance of him filing BK.If the property is directly involved that suing party may file a lis pendens and could tie you up.What are your damages if seller can not perform, you can file a lis pendens and ties it up on your end.Get title info if you can and seek counsel of attorney or be ready too.Can you close before all this pans out, maybe and if title is clear and you cover your bases might be something to consider.Or might be advisable to let it go and save yourself the headache but that is dependent on the deal itselfKeep us posted

Fees should be clearly stated, easy to understand, and justifiable.

Regarding the legal ramifications, it should be clear on your LOI that it is NOT legally binding. 

@PJ McLaughlin @Yuriy Skripnichenko the actual law is pretty clear that only with a new lease signing is the lead cert required, a lease renewal doesn't require it.

The opposite is also possible, but seeing all of the numbers will let us see this deal clearly.

Clearly that should be a red flag!