Wrap arounds in Texas?

[Connie Brzowski]

Hi all--

New to the board with a quick question.

I have a nice older home with a garage apt. in a depressed area that cashflows marginally... great for awhile, but the area is flat, taxes and insurance are going up (still feeling the effects of Hurricane Rita) and rents are maxed out. My current tenant loves the place but will never qualify for a conventional mortgage.

We generally buy, rehab and hold but I'm thinking about cutting this one loose. The house is highly leveraged with a first and second in place. If I listed on MLS, it might sell for 90K which just wouldn't make sense. I'd like to offer this to our current tenant at a higher price with owner financing, but I've heard that Texas has some of the worst laws in place for this type of transaction.

Could I do a wrap around mortgage here? Anyone know or know where I can find out?

TIA :)