Wrap mortgage

[Luiz Da Luz]

Hey there,

I'm looking for my first investment property and something came up that my be in our interest. My mother in-law has a SFH in the Houston TX area, and she's having some financial trouble for the past year and is willing to sell the house. The property is currently rented and it's positive cash flowing for a couple of dollars.

She would have about 25/30% equity in the house ARV, if she were to do some light rehab. Unfortunately she doesn't have money and time to do rehab, and put it for sale. At this time the only thing keeping the house is the rent she gets, but if one day the tenant decides to move she would have no way to keep the house. So we offered her some money (what she would approx. get from a sale with no rehab done) and we would take the responsibilities.

Our plan is to keep the tenant as long as he stays and do some rehab if he leaves some day, that would bring the rent up to about $300 positive cash flow. We considered asking to leave, rehab the house and rent it for more.

At this time we can't get a conventional loan, but she's willing to let us pay the mortgage. What would be the best way for us do this transaction? Would a wrap mortagage work in this case? Should we get a attorney to do this deal or just do it anyways, since it's a mother-daughter kind of thing? 

We eventually would like to refinance (BRRRR) it to our names and I believe if we have some kind of record would be good for us to approach a lender.

Thanks in advance.