If there were no advantages, why would we have laws that prevent tax shelters?

@Anthony Angotti Owner kept the lower unit unoccupied to sell and prevent any possible tenant issues.  

When I explored the options, the ONLY reason I could see for going the 'long route' would be that it *might* prevent you from doing 'prohibited transactions' since in theory that is part of what the Custodian is supposed to be doing (as I understand it). 

Therefore, excluded from the AML Program is any Federal or state agency or authority administering mortgage or housing assistance, fraud prevention or foreclosure prevention program, though manufactured housing entities participating in such programs must comply with the rule to the extent that any transactions could reasonably be considered to be extending a primary residence loan or offering or negotiating the terms of a primary residence loan.Technical Explanation of Anti Money Laundering Requirements Interestingly, the AML Program does apply to foreclosure prevention actions and counseling services performed by legitimate, non-profit organizations, to the extent any such organizations may reasonably be deemed to be extending a residential mortgage loan (including a short-term mortgage loan), or offering or negotiating the terms of a residential mortgage loan.

Besides paying in installments, I am wondering if anyone has ideas as to how to prevent this from happening again.

Of almost 400 properties that we manage, our average tenancy is almost 4 years, our days on the market are considerably less than most of our competitors, and our average annual maintenance on our homes (including inspections and preventative maintenance) is less than $900/year... that includes all the major maintenance as well (roofs, furnaces, plumbing issues, etc.)It seems that many investors consider property management as just a convenience, but I think that it is much more than that.

Her mortgage likely has a due-on-sale clause which may prevent a subject-to arrangement.  

We want to sell the condo, but are afraid legal action against the HOA could prevent buyers from getting financed, however, without some sort of action the problem wont be addressed.  

Sounds a little sketchy but I know the seller, what would prevent that from happening?  

When analyzing deals, I like to shoot for as high an IRR as possible while still maintaining a decently positive cashflow buffer to prevent me from having to pull money out-of-pocket for common expenses.I've been looking into the Wissinoming area of Philly as well, seems to have an interesting value proposition.