How We Structure Transactions

A Transparent Approach to Real Estate Acquisitions

At Federated Living Solutions, we structure real estate transactions that create flexibility beyond conventional financing. Our approach is grounded in clarity, documentation, and alignment with established lending practices.

We focus on three primary acquisition strategies:

  • Seller Financing
  • Mortgage Takeover Trust Acquisition Method
  • Hybrid Deals (Seller Finance + Mortgage Takeover Trust Acquisition Method)

Each structure is designed to provide a clear and mutually beneficial outcome for the seller, buyer, and agent.

Seller Financing

What it is

Seller financing is a transaction in which the property owner acts as the lender, allowing the buyer to make payments over time instead of obtaining a traditional bank loan.

This structure allows flexibility in pricing, terms, and timing while maintaining a clearly defined agreement between both parties.

How it works

  • The seller finances all or a portion of the purchase price.
  • Terms are negotiated, including down payment, monthly payment, and term length.
  • Payments are made directly to the seller.
  • The agreement is fully documented and secured.

Why it works

For the Seller

  • Ability to achieve full or near-full asking price.
  • Monthly income stream.
  • Flexible terms and timing.
  • Reduced risk of financing-related deal fall-through.

For the Buyer

  • Access to acquisition without reliance on traditional lending.
  • Flexible structuring of terms.
  • Ability to stabilize and improve the property.

For the Agent

  • Commission remains intact.
  • Increased likelihood of closing.
  • Expanded solutions for the seller.

Mortgage Takeover Trust Acquisition Method

What it is

The Mortgage Takeover Trust Acquisition Method is a structured approach to acquiring property while maintaining the existing financing in place.

This method differs from commonly referred “subject-to” transactions. It is not based on informal transfers, but instead utilizes a documented, trust-based structure designed to align with how lenders and institutions evaluate ownership and borrower eligibility.

How it works

  • The property is placed into a revocable trust.
  • The original homeowner may remain a beneficiary of the trust.
  • A third-party trustee may be used for neutral oversight.
  • The buyer assumes responsibility for making payments on the existing mortgage.
  • All terms and responsibilities are clearly documented.

Why it works

For the Seller

  • Ability to transition out of the property without immediate loan payoff.
  • Potential to preserve equity and receive payments over time.
  • Opportunity to maintain eligibility for future financing with proper documentation.

For the Buyer

  • Ability to acquire property with existing financing in place.
  • Flexible acquisition structure.
  • Opportunity to improve and stabilize the asset.

For the Agent

  • Commission is preserved.
  • Increased deal flexibility.
  • Additional solution for sellers who may not fit traditional buyer profiles.

Hybrid Structure (Seller Finance + Mortgage Takeover Trust Acquisition Method)

What it is

A hybrid structure combines elements of seller financing and the Mortgage Takeover Trust Acquisition Method.

This approach allows for a portion of the existing financing to remain in place, while the seller also carries another position. The result is a flexible structure that can be tailored to meet the needs of both parties.

Often used when

  • there is an existing mortgage on the property.
  • the seller has meaningful equity.
  • a full cash-out or traditional refinance is not the preferred outcome, or possible with traditional financing for a new buyer.

How it works

  • The existing mortgage remains in place.
  • The property is placed into a revocable trust (when applicable).
  • The buyer assumes responsibility for the existing mortgage payments.
  • The seller carries a secondary note for a portion of their equity.
  • Terms are negotiated, including payment amount, duration, and any balloon period.
  • All agreements are fully documented and clearly defined.

Why it works

For the Seller

  • Ability to receive monthly income from both the existing structure and seller carry.
  • Potential to achieve full or near-full asking price.
  • Flexibility in structuring how and when equity is received.
  • Reduced reliance on traditional buyer financing.

For the Buyer

  • Lower upfront capital requirement compared to traditional financing.
  • Ability to leverage existing financing terms.
  • Flexible structuring of payments.
  • Opportunity to stabilize and improve the asset.

For the Agent

  • Commission remains intact.
  • Increased likelihood of closing.
  • Expanded options for deal structuring.
  • Ability to problem-solve for sellers with unique situations.

When This Structure Is Used

A hybrid structure is typically considered when:

  • the seller wants both immediate and ongoing income.
  • the existing loan terms are favorable.
  • there is enough equity to structure a secondary note.
  • both parties are open to a more customized transaction.

Positioning

This structure allows us to bridge the gap between traditional and creative financing.

Rather than forcing a single solution, we are able to structure a transaction that aligns with:

  • the seller's financial goals.
  • the property's performance.
  • and the realities of the current lending environment.

Risk Mitigation and Oversight

We take a structured and professional approach to every transaction:

  • All agreements are fully documented in writing.
  • We work with experienced lenders, trustees, and transaction professionals.
  • We follow established lending guidelines and documentation standards.
  • We encourage independent legal and financial review.
  • Payment structures and responsibilities are clearly defined.
  • Ongoing communication is maintained throughout the transaction.

When utilizing trust-based structures:

  • beneficial interests are clearly defined.
  • documentation supports lender verification requirements.
  • third-party trustees may be used for added oversight.

Alignment, Risk, and Oversight

Alignment with Lending Practices

Our structures are designed with an understanding of how lenders evaluate borrowers after a property transition.

In many cases, homeowners may still qualify for future financing when proper documentation is in place, including lease agreements and proof of rental income. Rental income may offset existing mortgage obligations under standard underwriting practices.

All transactions are structured with these considerations in mind.

Risk Considerations

For the Seller

  • The existing mortgage may remain in the seller's name.
  • Most loans include a due-on-sale clause, however, loans may only be called due if title transfers, with the trust method, no title transfer!
  • Payments are made by the buyer under agreed terms.
  • Equity may be received over time rather than upfront.

For the Buyer

  • Responsibility for timely payments.
  • Obligation to maintain the property.
  • Exposure to operational risks such as vacancy and repairs.
  • Potential to lose the house due to defaulting on payments.

For the Agent

  • Structures may differ from traditional transactions.
  • Requires clear communication and documentation.
  • All parties must fully understand the agreement.

Our Commitment

We approach every transaction with clarity, accountability, and execution.

We do not rely on ambiguity or shortcuts. We rely on structure, documentation, and performance.

If a traditional transaction is the best path, we will say so. If a structured approach creates more value, we will explain how and why.

Our objective is simple: to ensure each transaction is clearly understood and beneficial to all parties involved.