Buying a motgage from a private lender... owner willing to deed in lieu as well...need help please

[Eric Robertson]

I was contacted by a guy that holds the mortgage on a small 2 bedroom house in my area.

He is wanting to sell the mortgage at considerable discount. We have talked back and forth and the guy seems to have gotten burned pretty bad by a business partner (the owner of the home) and the mortgage holder just wants out.

The home is worth maybe $35-45K I do not know the extent of repairs needed yet but it does have a tenant in place now. He is wanting to get $7-8K for the note.

After several emails I have also found out that the owner is willing to due a "deed in lieu" and walk away for $2500.

I know I need to do a title search on the property and it does have one prior tax cert for last year (2013) for $690. 

The owner does have a tenant in place in the home but it is a month-to-month so should be fairly easy to get them out if the end buyer does not want to keep them in place.

How would I go about structuring this deal? Would I pay off the owner for the deed and have him sign it over to the mortgage holder and then have him sign it over to me?

Would my title company be the best bet to get this all done?

This is not a "home run" $20K wholesale deal but if I can make $2500 and help everyone involved, that works for me. It would still give an investor a dirt cheap buy and hold property, and I can use the money to build my wholesale business.

Thanks in advance for the advice.