Typically a short sale is a process by which the seller can unload the property with the banks permission knowing they (bank) aren't going to get what they're owed. 

Thanks all, one thing I would like to add id that this guy has put in new hardwood flooring and perhaps other upgrades without permission.

This can be tricky unless you get permission, and loan info, from the current owner.

Surely, the sale couldn't proceed without THEIR permission?

And it turns out the loan was only supposed to be transferred once so they need special permission to do it again which is causing delays.

When you get the motivated seller that is will not accept your offer, ask them for permission to give your contact info to the realtor.

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So much that he gave me permission to sub-lease the property.

To do this you will need to make an "amendment" to the original agreement  which will give you permission to assign and sublet.Once you have received this approval, you can assign your contract or sublet to a tenant buyer for a higher cost and purchase price. 

With permission, I would pass the old tenant's number to the new tenant.