The proposed 20% of annual profit and 20% property value sounds like a good deal, given the limited value I'm bringing to the deal. 

The owner is pretty much stuck, the use of the property is very limited and the lack of financing alternatives drives marketability down as it is also reflected in the value.

Also, see if you can get a sense of the stance towards renters (problems, fees, limits, etc).5) Can you exit, even if owner financing them?

Something else you might want to look into are the income limits here (in some counties it is a bit higher than most people think) for qualifying for support/programs.

If you make this a priority for yourself, then there is no limit on the loan size for non-recourse.

And you'll have to hang your license with a broker, who will probably limit your personal investment activities, not to mention charging you fees and splits.

Your loan limits how much you can sell the house for to 2-3% per year after your costs (purchase price plus cost of improvements).  

In fact I suggest that you would be paying ABOVE normal market value, supposedly justified by their very temporary and limited "guarantee".There are many BP threads, blogs, webinars and podcasts devoted to helping us find deals that DO have built-in equity (and cash flow).

I'm not sure how much flood insurance costs on a duplex or triplex in Galveston, which would be a huge limiting factor potentially.

Which is more likely to occur.  1)  The bank calling a loan due on sale for transferring to an LLC, or 2) A landlord being sued and judgment entered in excess of my liability limits (500,000 per property, 1 million umbrella)?