Don’t lie to the seller.

They will help you clear any clouds on the title and know whether you can close in "7 days" as offered to the seller.

It may be worth having an experienced professional helping you and you could always try to get the seller to pay your agent’s fees.

Sale Price$171,000 - $55,000 (Rehab) - $13,680 (8% fees) - $40,000 (profit) = $62,320 MAOFrom talking to other investors and doing research, typically a Novation allow more money to the seller, correct? 

We already paid them a pretty sizeable entry fee ($30k) to cover some of their equity and debt in another project..Your title report should have alerted you to the issue.The payoff the escrow company got from the lender should have alerted you to the problem.Your interview of the seller before you bought the house, should have alerted you to the problem.You calculations on the numbers should have alerted you to the problem.Check, cross check and check again.

We're willing to live almost anywhere in the greater Sacramento area based on what we can afford, provided of course that the property is in a decent neighborhood that has a good chance of attracting responsible tenants.As for budget, I believe we could get a conventional loan for properties up to $600k, but my strong preference is to find a distressed property (or seller!)

The seller wanted to purchase another home with the proceeds from the sale of this one.

I come across SFR in other states from time to time direct to seller. 

Trust invests the cash to make the payments on the installment sale to the seller.

Quote from @Amit Chugh: While searching for apartments, i noticed a commercial apartment listed as Section 8 property, does it make any difference from buyer/seller perspective when it's listed as section 8 property.