First Creative Deal Attempt – Foreclosure Opportunity in Mississippi(Possible sub-to)
Hey everyone,
I wanted to get some opinions and advice on a potential deal I came across. I’m based in Oxford, MS, and have been watching a property over in Water Valley that just had a pretty big price drop — it was listed at $110k and is now down to $79k.
After doing some digging, I found out the seller is going into foreclosure. LI spoke with the agent briefly and mentioned that there might be a creative way to make it a win-win situation for both of us.
Here’s what I’m thinking:
If the someone is still living in the property and doesn’t want to move, I could potentially take over the existing mortgage (subject-to or something similar), pay them a small amount of cash since they want to walk away with something, and then let them stay as tenants under a rental agreement.
Before going any further, I have asked the to provide the following information:
- How much is left on the current mortgage
- Why exactly it went into foreclosure (missed payments vs. affordability issue, etc)
- If they stay, what they could realistically afford for rent
Once I have that info, we can figure out if a creative structure makes sense. If not, I’d just proceed like a standard purchase and schedule an inspection next week.
For context, I have a $100k HELOC available. I've never done a deal like this before, so I'm really looking for feedback and insight from anyone who's done similar. The property definitely needs a full rehab, so my thought is: if I can get into it for less than buying it outright, I could use the extra HELOC funds to handle the rehab and then refi into a conventional loan once it's stabilized.
Would love to hear from others who’ve done creative deals like this — especially around handling the foreclosure side, sub-to, working with sellers who might still be living there, or structuring it in a way that keeps everyone protected.
Appreciate any feedback, advice, or stories from your own experience!