Upon verification, the Landlord will pay you $2,000 cash, and both parties will sign a receipt acknowledging that your account has been settled.

This lets both parties separate rather than dragging out the relationship.

But I just want to start the conversation so we can negotiate the terms so it's beneficial for both parties.

However, deeds in lieu of foreclosure can be subject to judicial attack by their grantors and their grantors' creditors.Grounds for attacks on deeds in lieu of foreclosure include the following:• That the deed was an equitable mortgage - that the parties intended the deed to be given as security for a debt and that the deed was not an absolute conveyance.• That the deed is either a preferential or fraudulent transaction within the purview of the provisions of the federal Bankruptcy Act or any other related state law.• That the deed is a device to clog a mortgagor's right of redemption.• Unfairness of the consideration.• Coercion, fraud, oppression, duress, and undue influence.• That the deed is not subsequent to the execution of the mortgage but contemporaneous with it.• That the grantor/mortgagor was insolvent at the time of the execution of the deed.An estoppel affidavit (executed and acknowledged by the grantor/mortgagor, attesting to the fairness of the transaction, the consideration exchanged, the value of the property, and other factors showing an intention to make a genuine transfer) or a recital (inserted directly in the deed) are supporting documents used to forestall challenges to these transactions.State law and local title standards must be consulted in regard to the consideration and treatment of deeds in lieu of foreclosure.What a GREAT post!   

While they’re out partying, you’ll be home learning, analyzing deals, and honing your craft.

For the lease, can you list the girlfriend as an occupant rather than a co-tenant since she won’t be a financially responsible party?

Seems to be there was a bad judgement on the rehab from all parties.

The tricky part is that if we hold onto it , we surely will be in the red if we decided to rent it out.

If you have equity and decent credit, a conventional Fannie Mae HomeStyle (or the Freddie Mac version) would likely be the better option instead of an FHA 203k loan (which will require a 3rd party HUD consultant to oversee the deal in addition to having the contractor involved). 

Happy you joined the party.. how soon do you plan to start crunching numbers on a potential deal?