That amount gets netted against the debt as a baseline for establishing the deficiency amount so, the baseline net is $150M now in this example.

@Shaniqua Pope. buying a home "subject to" means you are taking over the payments, it does not change the foreclosure process from the first lender , unless you cure the deficiencies for the note holder.. a foreclosure is on the mortgage, the property title is the collateral for the mortgage note..

Research the concept of deficiency judgments in the jurisdiction of your friend’s property.In a simple foreclosure, the sole defendant would be the LLC owner.

This property underwent a special assessment and was found to have structural deficiencies due to poor construction processes in the 1970s.

One strategy many investors use is to bring their inspector with them when they view the property so they can spot any major deficiencies before the offer is placed.

in those scenarios you just hope your in a purchase money state and the bank ends up writing it off in Texas no write off the bank can and will sue you for a deficiency. 

Some things for you and your sister to consider while weighing your options...1-Buffalo area is seriously deficient in quality, trustworthy propery management.

I would proceed if you can cover the $30k deficiency.

There is anti-deficiency protection if you are individually the borrower. 

Some states allow judgments if the house sells at auction with a deficiency and some states you simply lose your money with no way to collect.