Keep in mind TExas allows deficiency judgements so thats a risk and why you never want to sell sub to in Texas especially

CA there is NO possibility of a deficiency judgement on a purchase money owner occ loan.. borrower can walk and the worse that happens is their credit will have a foreclosure if the bank goes that route or a deed in lu. 

on a 100 year old house that rents for $1000 a month that's about to need a new everything - that is spectacularly deficient.  

And I 2nd Bill's highlighting of such, so as great you feel they are, there is some deficiency there.

Therefore, if one inspector cites a deficiency that another didn’t list on the prior inspection, it’s back to the drawing board with another scheduled inspection.

If one bedrooms are are$475 a month then the numbers tell me they are mostly smaller units.I would expect to find an antiquated set-up that locals arenot attracted to with dated if not deficient plumbing and Mechanicals.

Also, you may not seek any deficiency judgment as the lender accepts the property as full payment of amounts owing, it is a deed in lieu of foreclosure.A bit more as to Special Warranty Deeds, they may limit warranty for a period of time, but other matters may also be excluded, buying Subject-To, the SWD will except out the existing underlying mortgage lien.

Gary, I'm not sure what you mean about how to structure the deal as the property usually has deficiencies or issues when most rehabbers get them, but not always, the property condition really effects the how or what kind of deal you need to do.Contract for deeds are common where allowed and the property condition is not an issue except in making sure the property will qualify for future financing requirements.

If you are re-listing, are you remedying any deficiencies that would keep them qualifying for conventional?

ANd they dont care about their credit and make sure their is no deficiency judgement there are bad actors out there that will intentionally not pay the mortgage and rip the rents until the bank forecloses a few years down the line all the while creamting the original sellers credit and frying their nerves and freying their marriage.