This strategy is great for pre-foreclosure properties. Contact owners in default proceedings to negotiate a deed transfer to your land trust, then your land trust (owned by you) becomes the sole owner of the house. You reach an agreement with the owner to take over his mortgage and continue to pay it off, including the back payments. You negotiate with the owner to reach a future price, for example 300K, about 20% below current market value. Your deed is now recorded to title subject to the existing mortgage. Therefore, no financing or refinancing is required. The warranty deed sale is structured in a way that you will pay ex-owner at $300K less any amount to pay off the existing loan when you eventually sell to other people. You will pocket any appreciation from this house.

Merit: You become the owner, yet the ex-owner (who was in default) still holds the mortgage. Basically, you are at no risk. The ex-owner benefited by avoiding foreclosure and retain good credit, also probably get some equity back from your sales. A win-win situation.