I've spoken with the owner-finance lender and she is willing to entertain changing the terms of the mortgage if we take possession of the house.

The sellers want to know that YOU have the money in your possession..

On the last foreclosure I bought, I then couldn't take out a traditional mortgage until the 6 month seasoning period was up after taking possession which was 6 months after the right of redemption (so 1 full year after purchase).This is a lot of sh*t to understand.

I'd need a downpayment, but I have investments I could pull from (not ideal but possible) that I could leverage for that.What I'm mostly wondering at this point is if I should consider a better way to structure this to minimize transfer costs in 2 years when it's time for him to take full possession.

@Jane Dang  Here's a notice template for you (it's the one I use in California):60-DAY NOTICE TO TERMINATE MONTH-TO-MONTH TENANCY TO: (tenants' names),AND ALL OTHERS IN POSSESSION of the premises located at: (address of rental property).YOU ARE HEREBY NOTIFIED that effective SIXTY (60) DAYS from the date of service on you of this notice, the periodic tenancy by which you hold possession of the premises is terminated, at which time you are required to vacate and surrender possession of the premises.

Had I possessed the knowledge I have now, I wouldn't have wasted 10 years waiting. 

To do this, I'll need to syndicate the deal, which meals I'll need to possess a track record of success in (I'm assuming) smaller deals.

The way I read that, the seller could at any time in perpetuity come back and devalue the property by removing that structure.It sounds like you need an attorney to advise you on the best course of action, but at the very least, a claim of "adverse possession" is worth looking at.

She can buy the note on the house but she won't be listing the house for sale without taking possession of the property through foreclosure or some other means (deed in lieu, etc).

The typical use of land contracts is to protect the interest of the seller (make it easy and cheap to regain possession of the property in the event of non-payment) with a less than stellar buyer.