short sale turns house into rental but we stay as renters?

[flower04]

A family member offered to buy our home as a short sale and use it as a rental property, with us being the first renters. We realize that we have to get the bank(s) to agree.

He is the only family member outside our parents that know we filed. NO one else knows at all. We were planning to walk away and let go of the home. We need our payment to be $600 less than what we should be paying on our mortgage. Is it wrong for me to say, "Yes, you can buy our home but we have to have our payment at $___ per month" Also, there are some things that need to be fixed if we are going to sell it (electrical) and so it would pass inspection. We weren't planning to spend the extra $ to fix it, seeing as we were going to walk away.

Owed on first : $280K, owed on 2nd: $70K, house is worth 315-325. (owe $350K).

Do you think it is a good option? I'd love your input.

[justbroke]

First, most short sales never go through. It's usually the bank that drags its feet and ends up reneging on the deal, at the last minute.

As far as a short sale to family... this will almost certainly not work. These types of transactions usually need to be an arm's length transaction. However, your family member may be able to offer market rate (current market value), but may still not be able to do this.