If that is the case, we would have to discuss your offer and the remaining principal balance on the loan.

Things to consider are self management, travel distance, property taxes, insurance, resource availability. 

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

You need a team of:General contractor, property inspector, trustworthy lender (they will have appraisers, and title company), property manager (make sure is large enough that if the person that manages it gets sick someone else will cover), insurance agent, and a real estate attorney in case you need a consultation, and most importantly an accountant with a lot of real estate  experience (this will be a major ally as you grow your business)Line up your team even before you look for the property.Go to networking events.

DaveI do not have any instruction to offer.

Hello, Both Connecticut and New Jersey offer their own unique advantages for real estate investment.

Saying that, we are only interested in buy-and-hold investments that offer positive cash flow upon purchase and some minor non-structural reno's. 

Your offer to purchase should include a requirement that the Seller provide all documentation and agree to sign an estoppel certificate (also called an estoppel form or agreement).

You said they have half the funds though so you are offering 50% leverage or are you offering 50% of the total project cost?

I would contact your renters insurance since that should be something they cover.