Seller Financing Through the 2nd Lien Position

[Steven Fitzen]

There is an investor in my area who writes a blog I like to follow, and in one of his recent posts he talked about how he purchased and flipped a condo while using seller financing to fund the transaction. I asked him how he navigated the possible due on sale clause and what he responded with blew my mind because I've never heard of it before. Naturally I inquired further until I felt I had begun to become a nuisance, and then, only slightly less confused, I began to harass others for information while searching the  forums in between replies. While I did not find the  answer I was looking for, I did learn enough to intelligently ask my question, so without further ado here we go... 

Once upon a time, in a galaxy far,  far away... 

A man purchases a condo that is in the initial stages of the foreclosure process, the seller is in no hurry to receive the full amount of funds and so agrees to allow the buyer to pay off the mortgage in full at the time of purchase while the original seller financed a junior lien position behind his private lender. Instead of making monthly payments to the lender (1st position) and the seller finance note (2nd position), he let both accrue interest and paid them off in full at the closing on the flip side when it was resold.

If it sounds like I know what I'm talking about, let me assure you that I do not. That was just how he explained it, and I can only pm someone so many times before I start to feel like a harasser and not someone with a zeal for learning.  So MY question is how would you structure this deal?  How do you seller finance this deal while simultaneously avoiding the due on sale clause by paying the mortgage off in full when you're using seller financing from the start? 

In advance, I thank all of you who take the time to help me understand.