Yes, Yes, with proper deposits and built in protection with rent prices via maintenance reserves.This is one method we are considering rather than trying to find a flip to increase investment capital this year.Thoughts, considering low Cash on Cash but possible increased investment capital through equity?

I properly recorded a second mortgage on a property.

Hopefully this image posts properly.  

Let me know if you have any questions on the below link.http://www.irs.gov/publications/p551/ar02.htmlIncreases to BasisIncrease the basis of any property by all items properly added to a capital account.

Expense:Mortgage- 648Mortgage Ins. 83Home Owners - 185Property Tax- 268.75Total=1116.08Income:Unit 1- 750Unit 2- 750Cable- 180Garage-75Total= 1755Cashflow--->638.92Sorry my spreadsheet didn't work properly!

I am wanting to find out if this sounds like a good deal and if so, how do I protect myself on paper and ensure that I am legally entitled to my share of profits?

Having a plan in place is the first step to ensure your success through the next downturn. 

It just means you have held a lien for the proper time and now you want to get your money back, with interest. 

I have read on some of the other threads on the Lease Purchase Option and understand how the concept works, but just wanted some feedback and direction on finding the proper forms and how to handle it so that as the owner of the property, I am covered. 

The more postcards you send out with proper frequency, the more deals you'll get.