Sounds like cash flow is not your main consideration but you want to insure that any investment is cash positive and more likely to appreciate.

As far as the improvements go - she made the improvements, not the buyer, so we are correctly calculating the basis.The deal isn't actually all that bad considering all of the circumstances - most notably that the loss would have been even worse had the property been sold to, say, an FHA buyer, with their nasty little concession requirements and brutal appraisals.After much consideration, the truth really is that my client is a part-time real estate investor, even though she actively manages the activity.

Taking into consideration the bad condition of the property and low-end neighborhood, I feel that HUD houses are actually over-priced.

I take pride in performing proper DD and knowing the answers while being considerate & empathetic enough to take the time to educate those I work with to the best of my ability & expect the same in return."

What other variables need to be or will be taken into consideration?

Buyers attracted to this auction method are usually buyers in which financial considerations are foremost - they will in all likelyhood not be the emotional buyers who would pay the highest price.

I know this may not be a consideration you are worried about for many years, but i have exactly what you described in a Memphis suburb that i bought in 2001 for $150k, it would sell today for $130k and will doubtfully in the next ten years touch $160k.

I also increased the taxes on that estimate considerably to take into account the change in ownership/taxable value.Just looking for some thoughts here.

years that they would accept considerably less than the asking price.

So, I'd just reduce that to writing and make the consideration $10 or something, just to document the whole thing.Having said that, I am one of those people who tends to ask for forgiveness instead of permission.