It's paid off or has a small balance but isn't quite financeable.

@Jast Collum  Does the 300k balance include the back payments owed? 

There's a difference, and that difference is how they benchmark cost of funds and interest rate risk from a balance sheet capital perspective. 

@Darryl DahlenHi Darryl, My wife and I are looking to attract small balance debt and equity, to participate in our scaling of Adult Residential Facilities-DD (developmentally disabled adults ages 22-59) ARF-DD.

HAFA provisions:* Eligible homeowners are those who acquired the home as a principal residence before Jan. 1, 2009 and have a mortgage balance no larger than $729,750.* The owner's monthly mortgage payment(PITI) as well as homeowner association dues, must exceed 31% of their income, and homeowners must prove financial hardship-loss of income, an increased mortgage payment or other unexpected expense.* Eligible homeowners also must have been previously considered for other federal foreclosure prevention options, including a refinancing or mortgage mod.* Instead of having a buyer in hand, homeowners can get preapproved for a short sale before the property is listed, provided the lender agrees upon a minimum acceptable short-sale amount,* Homeowners who successfully sell short can get up to $3K to help defray moving costs after the deal is don.

The building has a first mortgage of about $615kIt should now appraise at about $1.2m So does that mean something like the lender will borrow me say 75% on that new appraised value of $1.2m, say giving me 900k in which I'd payout the first mortgage, leaving me with the remaining balance of $285k which I'd be able to pocket?

I suppose a healthy cash reserve could make me feel better, but man it feels like there's a good amount of opportunity cost there and I want to try to balance solvency with making sure I'm investing as much as possible as early as possible.Thanks again for your comment!

All that is due is your principal balance.

There are many reasons for selecting a list price, but here is one of them: sellers need to balance between listing a property for so little there would be no profits, and listing the property so high there will be no buyers. 

They say strategic defaulters typically have higher FICO scores, lower revolving balances, fewer instances of exceeding the limits on credit cards and lower overall retail credit card usage.So much for being a good financial steward.