Creative Finance Question

[Dave Hurt]

Hello everyone, 

I have encountered a very motivated seller in my direct mail campaign, and she is open to creative finance strategies (in fact she prefers monthly income over a lump sum) - this is exactly what I've been seeking but now I have a few questions regarding the structure of the deal. 

To briefly summarize, she is widowed, lives 6 hours away, and moved out when her late husband passed.  Since she moved out of the property in '08 her friend has been living in the property at about $250/mo below market rent, and has not been taking care of the property (the seller's words - I am viewing the interior today).  The taxes for 2015 are delinquent, and the seller has a 35k equity loan against the property that she can barely make payments on as she lives off of social security.  

ARV for the property is around 85k, and I won't have a rehab cost estimate until later today once I've seen the inside.

I mentioned subject-to in my conversations with the seller, and she is very open to the idea, but would want something on top of that (the amount of which I can gauge better once I've seen the inside).

In the interim though, my question is this: would it be possible to take over the seller's Home Equity Loan subject-to, and she carry back some paper in an additional amount?

e.g. 35k subject-to, seller finance 15k, and I catch up the delinquent tax bill

She just wants to be done with the property, but does not want to sell all-cash due to the tax hit she will take, and she likes the idea of some passive monthly income - I'm just trying to figure out the best way to approach the deal.

Am I over-complicating it?  Could we just do a regular seller finance arrangement, and she continues to pay down her equity loan, building in a small arbitrage play for her?

It is very important to me that I do what is in her best interest and solve her problem.  She has spoken to 6 or so other RE investors and said she was only interested in working with me - because I took the time to listen to her issues and am open to creative methods.

Thanks guys and sorry for the narrative!