See the mortgage will remain in the sellers name, and he was saying that there was some escrow from the payments he made last year. he received some sort of statement and wanted to keep it. so since the mortgage company will not mail a check he was saying if i could cut him a check.

That means you would put some money towards principal with your next payment - $20,000, $30,000, whatever - they will take your principal amount, drop it, and re-amortize the loan over the remaining months left.

I normally say when you find a deal with the right numbers, positive cash flow.However I believe the market is at a peek, with the economy and politics as they are now pointing toward inflation and rising interest rates if you have cash to invest you may want to wait awhile, there is a good chance the markets will turn in the next two years and the vultures will feast.

I'll even go one further and say that some of my most successful and profitable have been "0.75% deals" ... so to me the 2% rule is less than worthless as it will tend to get you into low quality properties in low quality neighborhoods where you have low quality tenants resulting in low quality, highly volatile, and very management intensive cash flow along with zero appreciaiton (actually, negative appreciation after factoring in inflation) in both prices and rents.

Then if you have any remaining entitlement eligibility, you could use that to buy your next place that you would live in.

I don't think you can go wrong buying along the I-35 corridor from north Austin to San Antonio which has been and will continue to remain on fire.  

As such, one factor to consider is whether you are ready to pay the taxes now with the hope that you can grow the remaining proceeds by investing them in real estate.

Total PITI 1500 my payment.Underlying mortgage is 205k balance 13 years assumable PITI is 2500/mo…so seller intends to go -1000 month until the underlying mortgage is paid and his heirs are able to reap the +833 principle for the remaining 17 years.Property Cash Flows on my end.How do I mitigate the risk his side defaulting on the underlying mortgage?

They want to know if the rent remains the same as the rent has been and whether they have to move soon.You have a lot of moving parts here.

You might consider some kind of earn out so the current owner had a defined financial incentive to remain engaged during a defined transition period.