I read that title insurance is lost and this can be very dangerous in the long-term.

This mostly affects brokers, as they have to disclose the origination amount (direct lenders don't have to), which will be included in the 3% calculation, along with title fees and everything else.It does help protect borrowers from high charges, but not as much as you'd think.

I know that I will need a title report on the property to show what judgements, liens or encumbarances are on it, but how do I get that kind of information without coming out of my pocket?

From the time he initiated the set up of the IRA on Dec 9, and the funds were in there and ready to wire to the title company on Jan 16.

If the installment is a note and deed of trust or mortgage you can cash out as you have been in title.

For example title shows 2bed/1bath; however it's remodeled into a 4bed/3bath and of course the property is sold as is.Price seems to be listed as a median price and sounds like a potential investment property.Advantages?

Although it is possible that the (former) owner didn't know about the foreclosure, the odds are pretty steep that he is lying to you.While most of us investors might continue to hope and wish that "notice of foreclosure" means the date of the lis pendens or "notice of default", the feds and state case law have gone on to define it, for the purposes of this law, as:"The date of a “notice of foreclosure” is defined as the date on which complete title to a property is transferred to a successor entity or a person as a result of a court order or pursuant to provisions in a mortgage, deed of trust, or security deed."

Anything more than this I would use a title company for.

Learn to do your own title searches (medium learning curve) and create solutions to the owners pain in such a way that you can profit from the transaction.

A 1031 exchange with real estate essentially requires that you sell a relinquished property (or several) and acquire a replacement property (or several); all proceeds from the relinquished property must be used to acquire the replacement in order to defer all gains.So the closest thing to what you wrote in the OP is a "reverse exchange" where the QI acquires and the QI holds title to the replacement property and then you dispose of the relinquished property.