how would you structure this deal

[Mike Mitchell]

2 family house

-Seller owes 15k, with 2 years left on his mortgage. 

-PITI=1500

-both units bring in 1100 each. Tenants have been living there for 20 years and 6 years.

-Owner is motivated and wants 280k. but property is worth about 250 and it needs about 60k in work. 

-if not able to sell, he will continue to rent to current tenants and hire property management. he no longer wants to deal with repairs etc but likes the cash flow.

So 1st option is to throw out a low cash offer of what i can realistically pay to rehab and sell retail = 120k 

option number 2= pay off mortgage + cash to pocket and convince him to do an owner finance since he doesn't mind the cash flow. 

option 3= a lease option or  a master lease

but not sure how to structure this or if its feasible to me and the seller.

from my understanding most master leases are usually done on apt buildings. and lease options are usually done on a vacant single family.(never done either)

Personally I would like to flip or do a lease option to have less money out of pocket.