Buying with Seller finance strategy when a home is ordered sold

[Rich Lennon]

I have been a full time investor in Richmond Va for a few years now.  Although a lurker on Bigger Pockets I have never really contributed to this investor community.  I am making an effort to change and contribute  :)

I thought I would share, ask for any advice and see if someone had run into this situation. 

I met a home owner that was in a unique situation this past week.  She was listing the house for her mother, who was in a nursing home.  We got to talking and she made the comment that she did not care what she sold the house for.  Naturally I wanted to know why.  She said her mother was in a nursing home and was being taken care of by the state in her final years, as the mother had run out of money.  When she was admitted into care the house was pledged to the state and ordered sold.  All proceeds will go to the state. This of course is why the daughter does not care what the house sells for.  The stipulation from the sell order states the house be sold at a minimum the assessed value.  She has not been able to sell the home because the home is not currently worth its assessed value, although it is close.

The numbers were not there for a cash offer. 

I started wondering though if an offer of terms might work.  The daughter would  agree to sell the house to me at the assessed value of $93,000 in the form of 186 payments of $500 a month.  Certainly the daughter would be willing to make the deal.  The proceeds would go to the state, but over the course of approximately 15 years.  This, of course, would make it a good deal for me.

Does anyone have any experience with this situation?  Although this is the first time I have confronted this situation, I am hoping someone else has explored this strategy.

Thanks