I have a situation I am hoping someone might be able to offer an opinion on.We bought a house at trustee sale a few weeks ago. 

I tried to keep the sense of urgency while stating that this is something more personal than just a wholesale type situation (which may or may not add value I guess we'll see). 

This has been OK'ed by the IRS (in 2012).In your situation, in which you want to use the sales proceeds to buy another primary residence, there's a little more to this in order to structure it correctly.

How do others handle this situation? 

Good morning,I have a complex situation that is very strange.I closed on a property in Alabama (I am the buyer) in February and the money is still in Escrow at the attorney.The reason for this is "apparently" after the tornado the property was damaged.

I don't know your situation, but I always recommend people house hack their fist investment. 

Also "no lease" because you are in a month-to-month period of an existing lease and "no lease" because you don't have an instrument to take to court to evict someone are two totally different situations. 

well your description of the situation is not complete.. do you know its landlocked.. somehow if there is a home there I suspect it is not.. but it does happen I am in a landlocked case right now been two years fighting it thankfully I have title insurance and they are paying the lawyers.. first thing you do is not rely on your own due diligence if your not a surveyor or familiar with maps etc.you do one thing first .. you order a title report.. you may have to pay for it.. say 200 to 250.. your probably in a title abstract state. ( not sure but most of the NE is)  the title company hires an abstractor to do the court house work they will then write you a title commitment.. if your TRULY landlocked there will be an exception IE they wont insure access.. if this is missing then you ask them to clearly denote on the plat map where the legal access is.. you then take that map and see if it works on the ground.. 

Anyways when it comes to the situation of this lease renewal I was thinking of presenting three options. 

In our current situation we are saving 4-6k a month and look to boost that to 5-7k a month in order to acquire more properties.The end goal is to be able to live off the passive income in 8 years.