.* Now we can price the rest of the job

Its a sky is falling fire drill made to create a buzz and rush decisions and rush due diligence in order for the investor to preserve due diligence capital opposed to loosing the trade to another investor and thus the due diligence capital and time, etc.I am sure Bill can appreciate this, but rest assured this won't last.  

You then need to come up with the rest of the "down payment" or $20,000. 

These podcasts are FULL of very useful information and talk exactly about what you are trying to do.After you go through the podcasts related to wholesaling, listen to the rest so that you can familiarize yourself with other aspects of real estate (financing, negotiation, direct mail, and more).I am currently in the process of listening to the podcasts, and I must say that they are amazing in the amount of information they give you. 

Where's the rest of the story..?

And then how much tax you owe on it depends on the rest of your financial situation and what tax bracket you are in.Sometimes it's not worth doing a 1031 for a small amount of gain.

You need to make rent close to the fair market rent for the property, the rest or overage can go toward the option.To level the deal, if needed, give credits to the buyer of up to 3% of the sale price in the closing costs normally paid by the buyer.Interest rates are irrelevant on the seller's side the buyer is not assuming the loan.Don't attempt to wrap the mortgage as a subject-to deal as this is a lease and an option, you can look at principal reductions and apply that to the option, but again, you will then be accepting payments on the option and that is seller financing.

I could be wrong on my recollection/knowledge of the set up, but I believe her very physically handicapped aunt was the official section 8 tenant, and the niece was a "guest" who was not supposed to be staying there.  

Using an SD IRA with leverage can be tricky since you can only use a non-recourse loan for the rest of the purchase.

I have already read through the Beginners Guide recommend by @Paul Timmins...I will dive into the rest of the recommended reading tonight.