Credit bail out

Can anyone tell me if they have ever acted as a private investor to pay off someone’s mortgage (preforeclosure), and then taken the equity out of the house as payment…
If I were to do this, how should I structure the deal and what pitfalls should I look out for?

Well basically, all this really is is a Subject to deal. read the article about it in the articles section here, its basically just taking over existing financing.