It’s not only a classic “model”...I did it myself...sort of.
I lived in 1/2 of a duplex l0 months that was listed for sale/lease at $425K. 2 months before my lease expired, out of the blue, the owner offered me the place for $300K, no bargaining. She owned it outright and offered to finance the thing 15 yrs @ 7% (quite decent at the time, 1995) if I put 10% down. I wrote her a $30K check and starting making payments, shazam, the easiest RE deal of all time. The escrow people were absolutely furious at me because they made almost nothing on the deal.
You don’t by the way have to wait for the owner to kick; at least to start the idea wheels turning. Although, should he sell now he could be subject to a giant capital gain that is in most cases better handled by transferring the stepped-up basis to the heirs.
Still, strategically, you may want to start thinking about laying the groundwork for the deal now. It’s entirely a matter of the relationship you’ve developed with the current owner. *ANY* California RE deal *MUST* go thru termite inspection, even the most “as-is” of “as-is”, which itself is semi-meaningless in CA. Nevertheless, that could be a $4K-$20K affair the heirs will have to deal with off in the future, and it will be real money they have to spend. If you’ve been timely with your rent for a few years and place has some deferred mtce, those are things in your favor. They key is for you to put yourself in the place of the heirs, trying to sell a property which they have no attachment to, but which they will have to pay perhaps $20K-$25K each to sell. (assuming 3 heirs, $50K sales commish, $15K termites, $10K misc selling expenses) Yes, they got the property for free so in one sense it doesn’t “cost” them to pay those fees, (though they will have to advance termites & fixup) but you’re offering to deliver a 5 or 6% coupon to them they cannot ordinarily get.
My suggestion is to spend some time pondering this, I repeat, it is a classic situation than usually can be worked out into a very easy deal to everyone’s benefit without undue effort.