But that's not going to put it out of reach of the lender as collateral for your loan. 

-What if, for starters, we were to simply offer a collateralized pool of mortgages owned by an LLC.

I'd love to use these as collateral on business line so I can make improvements, $10,000 or less, and resell or lease out.

Now, it's that the houses are completely on the verge of collapse, and listing agents are accepting retail non-203k non-FNMAHomeStyle offers with quick closes, and then getting upset that they aren't closing fast due to the condition of the collateral, because they've deluded themselves into thinking that "hot market" somehow means that the Uniform Standards of Professional Appraisal Practice and Fannie Mae property standards (not FHA, Fannie Mae) have gone out the window.

One of the first things lenders will look at is the collateral.   

Other than a first lien position on the property, which can be difficult in CA depending on LTV, do you use anything else for collateral?

I asked the bank for the foundation repair money and 2k for collateral damage from the repair.

Also you could do a substitution of collateral and move the seller's note to another property you own that would be acceptable to him.

Having an attorney in that state is also good in case you have questions about a specific note/collateral.2) When you have to foreclose, which happens a lot with NPNs, then you'll very often end up with the house if no one bids on it at foreclosure auction.

The seller wants to move forward, and I talked to a local banker about a collateral-based loan as Plan B, just in case the note is called.