The lady is not an investor and purchased it for a member of her family who wanted to invest and has since taken it back into her possession.

Another issue may be that if the bank does not have possession and the previous owner still does, then they won't even get into a conversation because you don't own it and the seller will of course agree to any short sale price.

We called the company in possession of the loan (OCWEN) and found out that the TOTAL AMOUNT to buy the house (pay off existing mortgage + pending payments) was 77KThat brings us to Purchase price of 77kWe had an ARV of approx 110we ended up putting repair estimate at 20 kThat leaves 13k for profit and holding costs and rookie mistakes (aka not a deal)We passed the lead off to a wholesaler buddy of ours, who papered it up and in turn passed it off to a buddy of HIS who I heard is trying to figure out some seller financing deal with the owner.

For instance, an attorney may possess edited forms that translate into low total hourly bills. 

On that small of a house, re-wiring (which I would think would be nearly mandatory if for nothing but liability sake) and re-plumbing (which may not be necessary if all is working) would be fairly simple compared to a slab home, and I possess the skills to accomplish such a job....but it still would be an expense and hassle.  

My grandmother purchased a plot of land near Ocala, Florida which is now in possession of my mom and uncles.  

Possession is 9/10's of the law right?

However to be honest, these are just rough estimates and you really don't know with any precision the capital expenditures that will accrue once you first take possession of the property. 

you have to hold all possessions left behind by a tenant for 60 days.

After taking possession of the home I see that my "rehabbed" house is completely trashed.