Deed 'in lieu'

[Shelley F.]

Hi folks!

 I have not posted in a long time, but have been very busy with both my real estate projects (I consider myself an entrepreneur more so than an investor) and my family and 'real' job. My real estate projects are all the under 35k properties that need some help.

But I digress....somewhere along the way I met and was in effect mentored by a former mortgage lender and would call and ask him a lot of questions and get an unbiased answer. Then I started getting leads on great deals from him and rapidly built my (very modest) holdings. Im thinking that I see an avenue to streamline the next deal and save both the seller (the note holder) and myself some cash. Here are the facts as I know them (actual dollar amounts to follow) 

The property was defaulted a few years ago and tenants moved out. Place got trashed in the process and then vandalized shortly thereafter (this was way before I knew the seller or I could have helped them to secure the place) But seller never followed through on the foreclosure.

Fast forward to this year when I meet the seller and find out she never completed foreclosure, then to my astonishment realize that the folks who owe her...are some of my current employees! They mentioned this to me when I was talking with them about upcoming projects, and I realized that they thought the foreclosure was a done deal. They went through a tough time in the recession and I dont think are too worried about their credit score with yet another foreclosure.

So the note holder is reluctant to put out the extra cash to foreclose (I had no idea it was so expensive ) and to go ahead with my purchase this needs to be done. I mentioned a deed in lieu to her (note holder) as I thought I might be able to approach these folks and have them sign...they think the place is already gone (for years now) so might like a few hundred bucks to spend for Christmas. 

Im meeting with them next week...just looking for advice on how to approach them for a deed in lieu.

My thoughts are to offer them 300....through a title company of course, and maybe be able to go up from there.

I should mention that this is in California, I know both parties, and am looking for practical advice. 

Thanks in advance!