Picture a $280,000 house sitting in suburban San Antonio. Owner is three payments behind, foreclosure is closing in, and he is willing to take far less than market value to make it go away. That kind of motivated seller call normally pulls six interested buyers within 48 hours.
Two agents looked at it and walked. An investor I know passed on it too. All in the same week.
I stayed.
The complications were real. A PACE solar lien on the property (the kind that transfers with the deed, not the seller). A deceased co-owner still on title with no probate filed and no affidavit of heirship anywhere in the public record. And a $43,000 IRS federal tax lien that didn’t surface until we ran the full title search.
Three problems. Any one of them is enough to make most Texas real estate professionals call it a dead file and move on.
I’ve spent years building the specific skill set that looks at that combination and sees a transaction.
The Numbers on the Table
The seller owed $198,000. Fair market value ran about $275,000 on a good day. For a conventional cash exit to make sense for us, we needed to come in under $205,000. With $43,000 in IRS debt riding on top, the seller’s net at that price would have been negative. He couldn’t pay off the lien. He couldn’t afford a steep discount. That’s exactly why the investor I mentioned walked away.
The solar PACE lien had $18,000 remaining at 6.9% over 11 years, roughly $187 a month.
The title issue was the messiest piece. The deceased co-owner had two adult children we couldn’t locate right away. Until they signed or went through probate, the title was unmarketable.
On paper, this is a disaster. Three separate legal and financial landmines on one house.
Why Creative Financing Changed the Math
I called a real estate attorney I work with regularly. The heirship situation had a path. Texas allows muniment of title in simple estate cases, and with no debt owed by the deceased, this qualified. We’re talking eight to twelve weeks, not eight months. Expensive? Not compared to the spread we were looking at.
The IRS lien turned out to be the most workable piece of the three. IRS subordinations exist precisely for situations like this one. When a deal is structured correctly and the IRS believes they’re recovering what they’d get through a forced sale, they will subordinate or accept a negotiated payoff. We went back and forth for three weeks and settled that $43,000 obligation for $31,200. It’s paperwork and patience and knowing the process.
The solar lien we left in place. PACE liens in Texas are assumable, and the monthly payment can be factored into a subject-to purchase or wrapped into seller financing. The buyer we found was a landlord investor who wanted the property producing rental income. We structured a subject-to deal, the existing mortgage stayed in place, the PACE lien rode along with the new owner, and we collected our spread above the existing balance.
There’s no due-on-sale police and no due-on-sale jail.
What the Deal Actually Paid
After the IRS settlement, the muniment of title legal costs, our time, and the subject-to closing, we cleared $34,400 on a deal three other people abandoned in the first 72 hours. The seller walked away with $9,800 in his pocket and $43,000 of federal tax debt forgiven. No foreclosure on his record. His neighbors didn’t know his business.
Was it complicated? Absolutely. Did I earn every dollar? Yes, and so did the knowledge I brought into that room on day one.
What You Can Actually Steal From This
The agents who walked away weren’t lazy. They weren’t incompetent. They simply didn’t have the tools. Most Texas real estate education doesn’t touch PACE lien transfers, IRS subordinations, or muniment of title. Those aren’t rare exotic strategies for some insider class of investors. They’re repeatable plays in creative real estate that just don’t show up in standard CE coursework.
Do you know how many deals in Texas die every month because nobody in the transaction knows these three things?
That’s the exact gap I built Black Sheep Convention to close.
If you want to work deals like the one above, you need to be in a room with operators who’ve actually closed them. A room where somebody walks through the real paperwork, the real negotiation timeline, and the real exit. That’s what we do at the best creative real estate event in Texas every year: real deals, real numbers, no pitch-fest, no back-of-the-room close.
Black Sheep Convention is September 25-26, 2026 at the Hilton San Antonio Hill Country. Ten classes. Ten hours of Texas CE credit. Twelve operators who’ve done the kind of deals most agents still walk away from. All-access in-person tickets are $399. Live online is $99.
The skill set that closed the deal above is teachable. You just need to be in the right room when someone who’s done it is doing the teaching.
Black Sheep Convention tickets are on sale now.
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