Like you, I got them at a big discount because the risk was higher.Cash for keys is your best bet.

Is it possible to pay off their initial debt and then set up a sub2 or owner financed option?

Is it possible to pay off their initial debt and then set up a sub2 or owner financed option?

My initial strategy is to find a 2-4 multifamily property to help get my passive income journey started.

After 3 months of total exhausting rehab I refinanced @ 13% & paid him off.I still own this property (it's rented) & the smaller home next door just went on the mkt for $599,900.But we do get 18-20% returns up here based on what we initially pay & what we re-sell them at by holding the notes @ 12-14%. 

And also the seller agreed in the initial contract that the tenants were going to be his responsibility.

These are initial investment and yearly rental income.When calculating IRR, my understanding is that we should include sale proceeds as part of the final year cash flow.

We can only scrape together 5% down currently-hence the initial appeal of seller financing.

Weekly stays beyond 28 days and you now have yourself a regular tenant.Same applies if you initially agree to anything more than 28 days, like accepting payment for and agreeing to let them stay a month.

If the house needs work, or even if the systems are aging, I add this to my initial purchase price for the calculation, plus a contractor's price margin for the hassle involved.