Burned by a friend hoping to find some recourse... Any real estate attorneys please weigh in!!!

[Curtiaus Williams]

The following transaction took place in Texas and concerns property in Texas.  In November 2013, a friend of mine was having some financial troubles and had already moved out of the house she'd purchased.  She was renting to a family member and of course that wasn't going well either.  After the family member abruptly moved out, she was stuck with a home that she couldn't pay for anymore and on top of that needed about $7000 worth of repairs to make the home market ready (which of course she didn't have).  

Before deciding to just let the bank foreclose, I stepped in and offered to assume ownership of the property as an investment. Full disclosure: A CONTRACT WAS NOT SIGNED!!! I know that was my biggest, dumbest mistake, but she was a "friend."  We had a verbal agreement that I would become the owner of the property beginning January 2014 and in 18 to 24 months would purchase the home using more conventional means; to which she agreed.  From January 2014 through March of 2015, payments from my business account were made to her mortgage company.  Additionally, I invested the $7000 to rehab the property (most of which went to repairing the A/C).  I managed to find a tenant to rent the property for $1300 a month while the mortgage was $980.00, so the cash flow was decent during that time.  

Ultimately, in March of this year, she called me and told me she was selling the home.  After attempts to convince her to honor our agreement failed, I told her that I'd at least like to be made whole once the sale is complete.  The difference between What I earned in cash flow, and my rehab investment amounted to approximately $5000.  Although I have no contract, I have bank statements and receipts to support the notion of a sale having took place.  The lesson learned has been invaluable, but I'd like to avoid taking a $5000 loss if I can.  Do I have a winnable case without a contract?  Any advice or perspective on this matter is greatly appreciated.

[Steve Vaughan]

$5k is probably within the limit of small claims court.  I'd start there.  I won't tell you "I told you so", @Curtis Bidwell.  Real estate transactions are only worth the paper they're written on, as you have found.  There goes another kind-hearted helper, probably.  This lady just irks me!  She's probably related to some tenants I'm ousting now!