Am I trying too hard?

[Clay Sellers]

I have a seller in his 80s. He is behind 30K in mortgage and has a 40K lien on his home. Current mortgage balance is 600k (not including the arrears-30K) with a 3.5% 30 year fixed, payment $2700. (It's in So. California - VERY DESIRABLE BEACH COMMUNITY)

SFR, 4/2 - single level (5/3 - with permitted 2 story granny flat, permitted - part of Tax record)

ARV - $850K -(remember so. cal)

Repairs - $50K

Deals Presented:

1. $700K - Cash ($30K to buyer. (He really wants $50K to walk)

2. $100K - Sub. To. ($70k pay off arrears & liens) $30K to buyer to walk. (He really wants $50K to walk)

3. $70K Sub. To. (Pay Off arrears & Lien) ***He Like This One***

* He would like to stay in property (doesn't want to move if he doesn't have to) - He can pay $1500 p/m.

* Fix up the GF $5-8K

* Rent out the GF - Lease, or AirBnB (I would manage.) - Could command $1500 p/m lease, possible more as AirBnB.

While this third option doesn't give any cashflow, it does allow me to get into a very desirable property at a discounted rate. When they do move out, which I may be able to negotiate a time frame 1-2 years, rents for the 4/2 would be as much as $3200 per month.

Am I trying to hard? What am I missing? Is there a deal to be made?