Sub2 (take over mortgage) in good neighborhood

[Jessica G.]

I know someone who wants out of his house without dealing with a sale or foreclosure. He is considering sub2 (i.e. signing the house over to me and I take over the mortgage). One rent comp is $1350 for the exact same floorplan in the same neighborhood. Other rent comps look similar. I think I could easily get $1,300 for it, maybe a bit more. I would manage it myself. It would be my second SFR. (Have had the first for three years.)

The house is a smallish (1,300 sf) 3/2/2 in a good neighborhood in an affluent DFW suburb (Allen, about halfway between Richardson and McKinney) with awesome schools.

His monthly payment:

Principal $175.68

Interest $475.28

Escrow (property tax) $371.70

PMI $51.65

Recently sold comps make it look like the house is worth in the $125K-$130K range. He owes $114K.

I am going to go see it in the next few days. He bought it four years ago and says it needs: A dead tree removed, a few fence planks and maybe a post replaced, a deep cleaning. I have a cleaner who will do a deep clean for about $300. There are a couple of rooms of carpet that probably need steam-cleaning. I have a fence guy who will probably charge $500 for the fence. I have no idea how much the tree will cost.

He says the house otherwise is in very good shape and I will trust but verify with a professional inspection. The house was built in the mid-eighties and paint/flooring/appliances updated in 2010.

Thoughts?

ETA: Forgot some important info. Loan is FHA at 5 percent. Seller wants no money from the deal, just to walk away with no penalty. The house is also full of stuff (A/V equipment, furniture) I would have to deal with; I'd probably call an estate sale company.