Advice on townhouse transfer from family member. (northern virginia)

[Justin Sherman]

Hello, I'm looking for options/opinions/ideas on how to basically take over ownership of a retiring family members townhouse in northern virginia, for the purposes of renting it out long term.

You probably ask, "Why dont they just put it in a trust and name you the beneficiary?"
I don't want this to be a charity case , so I'm trying to figure out a way to "purchase" or "finance" the house without actually going through the traditional home buying process.  I.e. i want this person to get their equity out of the home (provided by me) without having the tax headache and drawn out process of a sale etc.. 

Folks local to the DMV area know how precious of a gift it is be able to have a lead on a nice townhouse , to not have to compete with other buyers and drive the house price up, so that is the advantage i have here, and i consider that a gift enough , without directly inheriting the house.

They arent hurting for the money, so im trying to think of creative or long term ideas, some things that come to mind:
1.) lump sum up front (maybe using irs gift limits?) and then split rent 50/50 until a limit is reached, once limit is reached i take over deed
2. ) somehow seller financing with a generous term

Please let me know if i am overthinking or getting too whacky with this, I'm just curious what others would do.

Some relevant details:
1/2 way through a 15 year mortgage
located in northern va
will be put in a trust regardless for asset protection
zillow estimate is 690,000


TLDR
want to take over family house to rent it out long term, but dont want it completely gifted to me, how can make sure owner gets paid over time?

[Christian Ehlers]

Quote from @Justin Sherman:

Quote from @Christian Ehlers:

Seller finance would be a clean and simpler way to set this up if you have money for a downpayment but cannot qualify for a traditional loan. If they are worried about the mortgage having the Due on Sale clause called you could set it up as a contract for deed instead so that the title doesn't transfer to you and the due on sale can't be called. 

 Thanks for the reply!  Just doing some quick googling on contract for deed, and it actually looks like it would fit my scenario perfectly.  When the payments are finished and the deed/title are in possession of the buyer, is there any Due on Sale at that point?  Also, is contract for deed a synonym for loan assumption, or is that still a separate/different process?

 I'm assuming you mean when you pay off the remaining loan balance? In that case there is no longer a mortgage so there are no payments to have due on sale clause called on. 

A loan Assumption requires you to get pre-approved for the current in place loan as if you were a regular buyer, however not all loans are assumeable (primarily FHA and VA loans are). Contract for deed is essentially a work around to gain ownership and control of a property, keep the current financing in place but not allow the due on sale clause to be called because the Deed officially transfers to you at a future date (usually when the loan is paid off by selling, refinancing etc).

A good attorney will understand contract for deed in your state and be able to point you in the right direction.