The property is zoned as a SFH, but in reality it is a duplex with 1/1 on each side.My lender did an appraisal for the property as a duplex and it came at $497k.

From what you wrote, @Morgan Chan, it looks like the lender’s credit bid was $300K.

It's a financing strategy where you would take on the mortgage payments, but the mortgage would still be in the sellers name and you would take title to the property. 

(other than having cash/equivalent, preliminary title report, and the appropriate deed ready to go 'on hand')The MOST difficult part of this will be getting the lender to provide you with the reinstatement figure to bring the loan current (I do this and take title sub-to because it's actually easier to get the lender to provide a reinstatement than a full payoff). 

Many HELOC or second mortgages are fixed interest rates and depending on the loan amount, even offer 100% online and no appraisal requirement for issuance.

Get pre-approved for a mortgage, conduct site visits, use analytics tools, network with investment groups, monitor foreclosure listings, and look for areas with long-term growth potential.

To move forward, save aggressively, network with local real estate investment groups, educate yourself on real estate investing, get pre-approved for a mortgage, and continue researching Dallas and Tyler markets.

@John UnderwoodMost likely it was a land contract they were buying which also would include assignment of land contractFor deed of trust / mortgage you get the assignment and allongeI know they are coming out with improvements to the site.If you think the buying process is challenging wait till you have to transfer a loan for servicing (not a paperstac issue) but that process is like catching your nails on a chalkboard

I’m curious if anyone would have a recommendation for lenders that offer second mortgages in Texas.

Failure to advise of this is not a breach, not fraud, not a misrepresentation, not a breach of duty, not a breach of contract -- nothing.Let me ask you this -- since you are on the lender side of things -- how is a lender harmed by having their borrower required to pay their investment each month - ie the mortgage -- and another party now required to pay the mortgage each month.