The only mission of the news is to spread doom and gloom to the masses IMOWith that being said, there are many areas in the city that are dangerous.  

It is usually dangerous to assume you can cut costs. 

But, some sellers will take that risk for time & convenience reasons.The reason it is dangerous for a buyer (yes, foolish & dangerous) to buy a property without equity, using subject to, is simply the DOS.

Generally speaking though as long as payments are made most sub to are OK.. its the under capitalized buyer the buyer that is an outright crook and so on that makes these so dangerous for sellers.. there is no real danger to buyer other  than getting sued by seller.

This places a spotlight on dangers of the loopy schemes these gurus are teaching.

Let them do a welfare check on her and see if she is a danger to herself or others. 

Two options... refinance and pull out the cash due to the explosive land value to finance your addition.Other option... sell... move into a new home and potentially not have a mortgage.Not having a mortgage... and going debt free could drastically change your family's life for the better, or having cash and successfully investing in other real estate... again could drastically change your life for the better.Good problems to have.

Buy and hold for the sole purpose of appreciation is a very dangerous game. 

If so, you are in very dangerous territory and should definitely STOP all your dealings with this transaction until you consult an attorney and the CA foreclosure consultant laws which specifically prohibits taking advantage of homeowners in foreclosure (in default) against predatory investors. 

And this is not the case for a true flip, as in Basit's #1.Mentioning #2 creates a dangerous incentive to ignore the rules applicable to flipping and rely on a flimsy declaration of "intent" to hold the property as a rental.