You might not have to take out a note, will she owner finance? What is your credit score? If its lower than 600 thats a problem, if so try this:

See if she will owner finance on a 3 year balloon, interest only. Then for three years build your credit up, you want 700+, that should get you prime rates. Then refi with a convential loan of your choice, I like 30 year fixed loans on primary residences. If your credit is 600 or lower you can still probably get a loan, but its going to be way over prime. I'd guess 7%-8%. But its not perminent you can refi when your credit improves and lower that.

Or
Does she currantly have a note on the house? Can you use it? Why not make payments on that note, draw up a contract so its all nice and legal.

When you rent a house the idea is to rent it for more then the loan payment to make a nice profit, but this doesn't always happen. So depending on what its worth your payments could be much lower, also you can deduct the interest from your income.

Also make sure you do not overpay, know what its worth.

Getting the money usualy isn't that challanging, their are thousands of ways to fund any RE deal. The trick is paying for said financing, and what the money wants from you.

You could set this up as a lease to buy as well, but it sounds like she needs a large chunk of cash now so that may not work.

Note: Talk to a RE attorny, accountant re laws very from state to state.

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