Send the paperwork to a title company?

Tell them the truth, you do not intend to take title to the property, but you do work with a group of investors and if you can get the house for the right price you are confident you will be able to sell it to one of your investor partners(true statement).Then if that sounds ok to them and your doing the paper work, buy an option.

How is HUD different than REO when it comes to paperwork and negotiating?

To earn that, he spent maybe a total of 5 hours making phonecalls, emailing me, and doing paperwork.

Lots of paperwork too.

Everything got mixed up when her 2nd (credit line) was paid off but never closed, paperwork mistakes were made at the county and bank acquisitions and mergers mixed everything totally up.

I haven't completed all the necessary paperwork before.

If it has only been ten days I would continue screening - DO NOT settle on your tenant - they will not only be your tenants but they are going to be your very close and intimate neighbors - and you will have to live with your decision LITERALLY - It's true that bad things can happen to good people - just be aware that some one who had to be evicted means that some other landlord was forced to give three day notices or 30 day notices, and when tenants did not leave the unit when requested to, forced the landlord to spend time and money going to the courthouse to file paperwork , pay fees and hire people to deliver notices and a whole slew of other things that are the opposite of cashing a rent check.

Since you obviously do not have experisnce with this technique I would recommend learning a little about the basic concept then if you want to try it do a Wholesale Lease Option where you just assign the paperwork to the tenant buyer and seller and just get to keep the option deposit as a fee.

You'll want to make sure to get all the proper disclosures signed obviously, but this is definitely doable.I don't wanna push any lines of "forum advertising" so mods, please let me know if I can't say this and I"ll remove- but since you're in Texas I am more than happy to help you structure the deal and get you the proper paperworks on this, we do approximately 10 of these a month and all contracts are lawyer drafted by a real estate and title attorney.You'd want to take the property sub2 for the amount owed, bring up the backpayments, and then market the property to bring a buyer in.