Potential deal from an estate...

[Kevin D.]

I walked through a property over the weekend.  It's in a nice little neighborhood; I actually have 3 friends that live within a block of this house.  The realtor told me that the owner died and the estate listed the house.  There is a mortgage of roughly $15k or so on the property.  I told her that I was an investor and that I couldn't offer close to full asking and would likely be below the amount that the estate owes on the mortgage.  Does anyone know if the estate is able to sell the property for less than the note on the property?

Pro's in my favor:  the house needs a lot of work.  Most is cosmetic, but the owner tried to redo the bathroom and botched the job, so its a complete gut job.  That said, it means a bank will not finance the property and they need a cash buyer.

Con's: The previous owner got the property subdivided and basically built a house in the backyard, so the house I'm looking at has absolutely no yard which would severely limit resale value in this market.  This HAS to be a buy/fix/hold deal..

Any savvy vets out there want to offer some advice?