This left-over debt is called a deficiency.

If he was including the new HVAC and water heaters under his scope then I agree the electrical might should have been pointed out, however if the owner contracted for these items with someone else I am not sure that the contractor is responsible for electrical deficiencies that arose later.I think this is the danger in having a time and materials contract and sometimes it works sometimes its does not.

For most debt, the Texas statute is 4 years, for deficiency judgements it is only 2 years. 

Remember that if there is a serious deficiency in the appraisal that results in an incorrect value (up or down) talk to your lender. 

However, your father may still be on the hook for a deficiency judgement for any remaining unpaid mortgage balance.  

Here is a simple and easy guide that will resolve all these challenging questions:  (3) Secrets Everyone Needs to know about using a 203k loan Finally, the FHA appraisal & inspection - this is no different from a conventional loan appraisal other than the inspector is looking for various health & safety and large deficiencies that would make the home inhabitable.  

One of the deficiencies the home inspector noted was the heat furnace had rust in it and may be cracked and may need replacement.

Check on any deficiencies that the old landlord may have "forgot" and present yourself as a professional doing a good job.

Memo 1982-51Findings of Fact and Opinion of the Special Trial JudgeHALLETT, Special Trial Judge:Respondent determined a deficiency of $3,653 in petitioners' 1977 Federal income tax.The issues for decision are: (1) How should the total purchase price of two condominium properties acquired by petitioners during the taxable year be allocated between land and buildings for depreciation purposes;Petitioners resided in Los Angeles, California, when they filed their petition in this case.Depreciation Issue:During 1977, petitioners purchased for investment purposes two condominium properties known as the Via Serena property and the Calle Sonora property.

I'd be looking at about 24 to 30% yield, perhaps more, just to give you an idea.I would require the seller to show banks statements showing past payments being deposited or drafted from an account, never take someone's word that it is a performing note.Get credit on the borrower and see if they will ever be able to refi and see where he is at.You might see how strong the seller is and their ability to repurchase the balance if anything goes wrong, selling with the agreement to repurchase will limit your risks, if they are capable of doing so, most times they can't but you could have recourse with them for any deficiency but not with the maker of the note.