Sounds like a pretty dangerous deal to me. The article that Mr. Rational linked to explains the "what ifs" of only two of the possible scenarios. But the most likely two scenarios he doesn't mention.
(1) What if you have trouble finding the sucker to rent to own from you, after you are committed? What if the property sits empty for a few months, while you are paying the rent-to-own payments to your LL? The author forgot to include those expenses in your optimistic profit calculations, didn't he?
(2) What if the sub-tenant falls behind in his rent payments to you, the tenant? I know that we, as LLs, know that tenants never breach their financial obligations, but just suppose this could possibly happen. So now you need to evict the deadbeat sub-T, you need to keep paying YOUR rent, you need to do the turn-around work and try to find a new sucker to sub-lease-to-own.
Yes, it could possibly work out, but it seems like a very stupid investment to me.
Sorry, Lensim, I don't have a form for you. Which role do you wish to take in this game, Owner, tenant or sub-tenant?