I'm assuming that Gary meant $500, not $500,000...since there are plenty of properties in virtually any county that can be bought for $500,000.
And the answer is: Sure. I've know plenty of people who've done it. Buy it subject to (Sub-2) the existing mortgage. Here's how they do it (for those who don't know subject tos): They find a homeowner in distress who wants to get out of a bad situation. The owner is willing to give the house up, just to get out from under. The investor says: "I'll buy your house subject to the existing mortgage. That is, you deed the property to me. I will own the house. And I promise to pay your mortgage on time. At some point in the future, I'll refinance, so the mortgage will then be in my name, not yours. But, until that happens, the mortgage will remain in your name."
Disclaimer: I'm not a lawyer or an accountant. I'm not offering legal or accounting advice.
Advantage to the seller: Relief from a bad situation. And if the investor makes good on his promise, even an improved credit rating for the seller, since the mortgage payments will be made on time. Risk to the seller: He's given his house to the investor, but is still on the hook for the mortgage. Also, transfer of equitable interest violates the lender's due-on-sale clause. The lender has the right to call the loan.
Advantage to the investor: He's acquired a property--gained legal ownership of the property--with little or nothing out of his pocket. Risk to the investor: A moral obligation to pay the seller's mortgage. Also, that at some point in the future he'll be able to refinance the property.
Sometimes, in a subject to, the investor will pay the owner some money, either for moving costs or for some of the equity that the seller may have in the property. And that could be $5,000, $10,000, or more. Other times, though, the owner doesn't have much equity, just wants to get out, and is willing to accept little or nothing.
So, yes, I know investors who have bought properties subject to for under $500.