Yes you could pay yourself, lower the cost, reimburse yourself some of the down payment. 

To start, these are the fundamental underwriting inputs the GP/Syndicator will be making when arriving at their offer price:Management Fees: This will be very similar to any other bidder who relies on 3rd party management (and generally more expensive than a local operator who benefits from the efficiency of managing an existing local portfolio).

Smart investors increase earnings, reduce expenses, increase savings, and buy wisely.

Definitely consult a local attorney as it can be expensive if she really has a case.

Projected income minus projected expenses etc.

We would also have to have a pool of money for shared expenses for the property for renovations, cosmetic, upkeep. 

Two bedrooms in that size especially with a basement which probably has lower ceilings and not a lot of windows will look more like a prison cell/

The other two options require spending money that is basically going out the door to lots of fees and expenses of exiting your current house and getting into a new one.If you were just looking to move, that is perhaps a different story… If your house isn’t working for you, for instance.

Now that it's a rental the home barely cashflows due to expenses and the high mortgage.

I’m in at best a third tier market but probable lower than that.