Deal Structure

[Joe Krevinghaus]

I had a question on structuring a deal and I was wondering if I could get some advice. My dad is looking at buying a house on land contract in Michigan. He is aware of our real estate business and offered to let us take part in the deal to gain some experience. His plan is to purchase on land contract for 60k (house is worth ~100k). It's a 5 yr term with a balloon at the end. Then he wants my sister to take on a 2nd home loan to purchase the house from him (payoff the land contract as he doesn't have the credit for a conventional loan) so she can gain tax benefits and to cash out the equity. Afterwards she will rent it back to him. Would I want to use some type of option form or just an assignment? Any insight would be appreciated. Thanks, Joe Krevinghaus