Hi, thanks for reading. 98% of the homes in my area fall into two categories: cheap but bad neighborhood; nice but will sell all-cash within 4 months. So, when I find the rare person willing to take payments, I want to jump on it. The seller has a loan on the property and he's going to sell it to me. We both know that this may violate the due on sale clause, but neither of us are too concerned. His payment on the mortgage has taxes and insurance escrowed. I was going to simply take it over sub2, but he doesn't want to do that. So, these are my options:

1. I buy it from him on INSTALLMENTS/LAND CONTRACT, and we record a "Memorandum of Land Contract." This would, I think, prevent any liens against him from going against what will at that time be MY house. I'll get title insurance if they let me. Negatives: bank could be mad. More importantly, although he already has a landlord insurance policy, it's in HIS name. Wouldn't I have to name myself as additionally insured? I don't want to get nothing out of the deal in the chance there's a disaster, not to mention my tenants who will be in there.

2. I buy it from him on LEASE OPTION. Insurance is fine. Due on sale clause is fine (well, an option may/may not be seen as a complete sale, but better than land contract, I'd think). But if I do it this way, what happens if he gets a lean against him? Also, I can't buy title insurance on this either, right? Also, in EITHER of these situations, if he stops making the payments, along with his credit, I'm screwed, right?

3. (Learn a method to convince him to give it to me subject to! We've already agreed I pay $2k down. Unfortunately he's already said no to this :(