A family member with wife and child and minimal means is looking to buy a first home. Via a friend, they discovered an unadvertised house just out of their price range where the seller is offering to sell the house at discount provided he can live rent free in the upstairs for 5 yrs. The area is not zoned for multifamily but the seller has had a tenant whose lease runs out next month and will be vacating. Aside from the risks of being stuck with a tenant who could turn out to be incompatible or worse or the neighbors reporting a ? zoning violation, what other bombs lurk?
Part of the story is thought to be that the seller needs cash for child support or divorce settlement but has sweat equity in the house and would just as soon stay. If a divorce settlement is involved, I suppose one should avoid this deal as the spouse would have every right to demand fair market price for the transaction. How can one be assured of where things stand with regards to a spouse/ex? Is a deed registered in the seller's name only sufficient?