The facts and challenges are-1) The house is listed for sale on the MLS and it’s “short sale listing approved by bank” leaves no deal. 2) The first lien holder, which is a FHA loan, is for foreclosing and the sale date is set for about 3 months from now. 3) The owner died and his estranged daughter now has the right to sell. 4) The estranged daughter has zero motivation to engage in the process. 5) The lender is owed about what the houses ARV might be after $75k in renovations and carrying costs. 6) I’ve been able to connect with the attorney handling the foreclosure in the interest of pursing buying the note who reports that since it is FHA they are unable to accept a short payoff.

Would you care to elaborate on which metrics you find to be the most effective to target value-add properties with sellers who would be motivated to sell their homes for 65-80% under market value?

One thing you'll need to look into is how would having a mortgage on the rental in SC effect your DTI and your ability to qualify for a mortgage?

Granted, I've been actively engaged in the commercial real estate industry for 17 years so I know and understand this space well, so for me it's likely easier than for other investors new to all real estate types.That said, there is a reason that many of the investors who've been interviewed on BP, written books, and grown a portfolio often scale or "trade up into commercial" over time, so they can achieve the benefits I mentioned above.

Read these links (hope they work) and of course, consult your tax professional.Two blogs that talk about this situation.https://blog.militarybyowner.com/important-tax-matters-for-military-families-when-selling-or-renting-a-homehttps://blog.militarybyowner.com/the-effect-of-capital-gain-tax-exclusions-on-military-home-sellersIRS Topic 701 - The Sale of Your Homehttps://www.irs.gov/taxtopics/tc701IRS - Publication 523 (2018), Selling Your Home - which outlines the exclusions.https://www.irs.gov/publications/p523#en_US_2018_publink100073089

Realizing that putting the right tenant in the property even if you are loosing a few days in rent is far more cost effective in the long run. 

Dennis I understand your point, I do not want to be a slumlord I'm just trying to figure out the way to do it cost effective and affordable on both sides. 

Hey all, so i had the notice to quit assigned to me after beating the sellers attorney over the head with talk to the effect of litigating for a clean sale.

This doesn't take into account the time value of money, but as long as the interest rate is greater than the inflation rate, the net effect is that they're earning more from your offer than from another offer which is financed by a conventional loan. 

This post was really to get other investors from around the country to engage about their markets and what their returns are!