What's your creative way to sell this house?

[Jeff Cantrell]

We have a potential tenant interested in buying one of our rental properties.  We've got about $40k in it and have owned it for about 10 months.  Rents for $800/month.  "IF" we sold it, it would have to be for at least $69k.   
I'd like to hear some creative ways to structure a deal with the potential buyer.  They can come up with $4k now or $7k in 60 days for a downpayment.  They can NOT get traditional financing, so us financing would be the only way for them to purchase a home.
We have not yet discussed purchase price.  What's the best long term play here?

Thanks in advance!

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Originally posted by @Jeff Cantrell:

I’m thinking about doing seller financing for him at 12% for two years to let him build/fix his credit and then helping him refinance with a bank and me cash out.

We’d make around 16k in interest over the two years and and he’d be making a payment that’s $100 lower than rent and building credit at the same time. Win win. We’d profit approx $25k at when we cashed out and then could 1031 that into another property.

Something I could add to this to make it better?

We’ve never sold anything before so this is unfamiliar territory.

 With 10% down and 12% interest I'd do that deal with him. You are better off using a Lease Option than using a mortgage. If he defaults with a Lease Option you can evict, if he defaults with a mortgage you have to foreclose. It's a huge difference.