Great investor opportunity, with a seller that won't budge

[Jeff Thomas]

My girlfriend is a Real Estate agent, and her family friend is wanting to sell his property for what he is convinced is market value at $400k. He currently owes about $40k left on the mortgage. The property itself is less than 600 sqft, distressed, and most likely may need to be rebuilt. The lot size is 8,900+ and imo would be a great opportunity for someone who can completely rebuild to fit the current market which is anywhere between $700k-$1mill or try to remodel and maybe add a few more bedrooms. No matter how many CMA's my girlfriend provides and conversations she has with keeping up to date on current market trends, he is convinced that an investor is willing to pay him the amount he wants. Don't get me wrong, the property is in a great area, but neither myself nor my girlfriend can find an investor willing to take the time to talk to him more about the property or willing to give him anything close to the amount he wants. It was listed on the MLS but taken down within 7 months, TWICE! Any advice on an approach to take, or advice on how to overcome? He seems desperate, but just will not budge.