Best way to sell a tenanted property?

[Nate R.]

I have a property in San Antonio that I have been wanting to sell for awhile. The tenant is on a one-year lease that expires in a couple of months. 

They have not kept up with the rent and are behind by more than a month, but they have been making payments recently. My property manager doesn't want to evict, even though at one point they were so far behind it seemed obvious to me that we would never collect the past due rent. He suggests waiting until the lease expires before taking any action. 

I've considered just selling to another investor rather rather than dealing with an eviction, fixing up the property and listing it on the MLS. How would I find an investor to sell to? I get these postcards from "cash for houses" buyers, but I assume they'd be looking for very deep discounts. I'm not sure if I can believe the Zillow estimates, but with the current value listed there, I would be sitting on over $100k in equity with about 50% LTV.

[Nate R.]

The situation seems to be that the tenant is trying to make payments but is struggling to earn enough to afford the rent. She is a single mother on some kind of government assistance (disability, I think). When the subject that we would have to evict for non-payment came up, my PM says she has said things like she can't find another place to live because there's "nothing" (or no other houses) available.

I figure one of two things is going to happen 1) There really is nothing available and no manager will accept her application because her income is too low, so we'll have to take her to court 2) She'll find some other option (rooming with others? small apartment?) once we notify her that the lease won't be renewed, so she is likely to skip the last month.

She seems to have settled in and considers this place home, and has mentioned wanting to buy it, but I know she wouldn't be able to obtain financing. Maybe if she knew she staying is not an option, it would light a fire under her to find other arrangements. I've sent 30-day notices before. On top of it all, my property manager, who is sympathetic to her plight, is undermining me. I would have filed for eviction myself if he hadn't convinced me to wait a couple months. I've considered trying to self-manage or hire an interim PM but don't like those options either.