Dilemma... what to do?

[Dan Simpson]

So I bought a fixer house for $40k and got a loan from the bank for $51k for the purchase price and fix up costs. I have about 57k total in the house. One of the folks I had working on the house has a daughter who wants to buy the house, but she applied and did not get a loan. I was going to sell it for 79k to her.

Since they can't get the loan, they want me to carry back the mortgage after giving me 6k down. I'm against this for several reasons, not the least of which I want to cash out and take 20 or so grand and move on, and because I won't have much cash flow if I finance her. The most I could cash flow on this house is $250 a month or so. 

She can't do a lease option because she says she can't pay more than 600 a month. The market rent is around $750 which is what I'd want on a L/O.

I know the easy answer is to shoot down the idea and try to sell it outright, but I'm afraid I'm going to have a hard time telling these people no. But I gotta stick to my guns, right?

Anyone else been in a similar position?