Need advice on best deal structure!

Nacogdoches, Texas
Buying & Selling Real Estate
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Need advice on best deal structure!

William Bruns
Member since 2019 · 1 post · 0 votes

I have found a seller who would like to sell me her home in Lufkin, TX. 

The background is that this home was her mother’s. Her mom passed away only a couple months ago. She is now the heir of the property. The property still has an $82,000 reverse mortgage on it. Also, the mom had financed an HVAC system that she still owed $5k on. I had agreed to pay them the roughly $87k to get the home. We had originally agreed to $80k before the daughter was made aware of the full balance on the reverse mortgage and was not aware of the HVAC loan at all. The title company has told me they must also wait until they get verification from the hospital, funeral home, and Medicare that there are no other debts in the mother’s name that would be required to be paid off. 

I originally planned to purchase it traditionally, but does anyone see another way that I could structure this? Could this be a seller financing deal or subject to? Is there a path to whole selling this property that y’all could see? 

I just feel like it’s too good of a deal to give up on because there is profit to be made on the property. It’s just a bit complicated. Please help!
 

Thank y’all in advance! 

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  • Michael Eskenasy
    Investor · Pacific Northwest · Member since 2026 · 538 posts · 314 votes
    2mo

    William — I actually think the deal may be simpler than it feels.

    I would not try to force a subject-to structure here. If that $82K is a normal FHA reverse mortgage, it became due when Mom passed and it isn't assumable.

    Seller financing probably doesn’t solve much either. You’re basically buying at the debt payoff already, so there isn’t much seller equity left for the daughter to finance.

    The thing I’d focus on is getting the estate/title side completely clean and protecting your price while that happens.

    I’d want:

    Exact reverse-mortgage payoff.

    Exact status of the $5K HVAC financing and whether it actually attaches to the property.

    Confirmation of who legally has authority to sell.

    Any probate/estate creditor claims.

    Any Medicaid estate-recovery exposure.

    And a clean title commitment showing exactly what has to be paid at closing.

    One thing I’d specifically ask the title company: when they say they’re waiting on “Medicare,” what exactly are they clearing? Medicare itself is different from Texas Medicaid estate recovery, so I’d want that explained precisely.

    If everything clears and your basis is really around $87K, then I wouldn’t get cute just for the sake of being creative. Sometimes the baller structure is simply buying a deeply discounted property with clean title.

    Wholesaling could be possible if your contract is assignable, but now you’re selling your contractual interest, not pretending you own the house. In Texas that distinction needs to be disclosed correctly.

    The real question is whether $87K is actually a killer basis.

    What’s the house worth as-is?

    What does it need?

    What's realistic ARV?

    And what would it rent for?

    If those numbers are strong enough, I’d spend my energy making sure this thing closes rather than inventing financing around $87K.

    And if you really want to party, send me the address.

    That’s when we can figure out whether you found a complicated little house or an absolute layup.

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  • Joe Piccirello
    Lender · Peoria, AZ · Member since 2026 · 38 posts · 11 votes
    2mo

    On the financing side, a reverse mortgage is generally not assumable and becomes due when the borrower passes, so subject-to is usually off the table here. Both the reverse mortgage and the HVAC lien would need to be paid off at closing, and title will want the estate to have clear authority to convey before anyone funds. Seller financing only works if the seller can pay off those liens, which is unlikely at this price. That makes a normal purchase loan the cleanest path, and the product depends on your use: conventional if you will occupy or hold it in your name, or a DSCR loan underwritten off the property's rent rather than your income if it is a rental. Keep in mind many lenders have loan-amount minimums that a sub-$100k loan can fall below, so ask about that before you commit to a closing date, and build in extra time for the probate and title work. I'm a loan officer licensed in Texas.

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