Quote from @Jessie Dillon: one thing that you can do is have the seller transfer the deed to a living trust that they're the sole beneficiary of, and call the bank to give them a heads up that they're doing it for estate planning purposes. then, a month or more later, buy the property sub-to, and change the beneficiary of the trust. the bank can not see who owns a trust, and if they ever come back and question it, you can just swap the beneficiaries again, show the bank that the seller is still the owner, then swap it back again when they buzz off. this is one of many reasons it's so important to keep a good relationships with the seller if you're buying this way. you have to work together on some stuff.In summary: fraud. 

We now own the beat-up POS property that we need like a hole in the head.

Think of this;  if the buyer can't qualify for a bank loan,,,, why the heck should you stick your head into a note and mortgate noose??   

As a sole operator, you have all the policies and procedures in your head and can apply them to many properties without referring to a binder.

Try to simplify your first deal as much as possible (the deal you described is over my head and definitely outside of my risk tolerance).

I appreciate the heads-up about the saturated multi-family market, that's definitely something to consider. 

Just a heads up this will not be tax free, it will be a pro-rated exclusion.

I am hoping this gives me a head start in funding the initial investments.I also have some high balance liquid assets, but I am putting all or most those funds into other investment vehicles to diversify my holdings such as stocks, bonds, etc.

That will help you diversify and also give you optionality when head winds come.  

There North Carolina purchase leaves me scratching my head.