Off market opportunity, strategies to make it work?

[Nichole Kinard]

I have a lead for an off market single family home. It belonged to the seller's mother who recently died. There is currently an elderly 20-year long tenant who has taken good care of the home. He obviously wants to stay in the home but pays way under market value for local rents. In short I want to know ways that you have made deals like this work and/or any creative solutions for keeping a tenant in place. I'm not sure what all info you'd need to give relevant advice, so here's some random info about the property. 

- The seller has no interest in keeping the property (I guess that makes her a motivated seller?) but not in a rush to put it on the market because she's busy. 

- A nearby similar property just sold for $350K but was updated. This house is not updated. Local rents are only $1800-$2000 but the area is up and coming and is conveniently located. All that to say, I highly suspect appreciating home values and increasing rents in the coming years, but current rent is lagging behind home price.

-  The current tenant only pays $900 and can only increase a little because he pays with his SS income. 

- If I were to find some creative renter solution and low-ball the market rent at $1700, I could only put in about $180K total assuming a conventional mortgage to generate acceptable cash flow.

So, apart from increasing rent and managing the property myself what are ways that I could make something like this work? How could I create a win-win for the seller and myself? Creative financing options? Other things an inexperienced real estate newbie wouldn't think about? When negotiating with the seller, what are things that make it worthwhile to buy in an area where rents are lagging behind home price? Is there a good opportunity hidden somewhere in here? Maybe I'm too hopeful but I don't want to pass it up if there's a way to make it work for me.