So Close I Can Taste It....But Need Advice!

HERES THE DEAL 1st Mortgage - $166,00.00 good standing 2nd Mortgage - $56,500.00 in default comp study apraisal - $240,000.00 HERES THE SITUATION The seller does not care about the equity, i offered to give hime 2,000 cash at closing for motivational purposes. The lender of the second mortgage has agreed to a short sale offer of $40,000.00, i need to back up the sellers foreclosure date to do a more in depth due diligence on the property. How should i approach this? and if i do what is the best option to purchase and/or flip the house? Or would it be recommended to just drop the deal? this is my first deal and am a bit nervous. ANY ADVICE WOULD BE GREATLY APPRECIATED. thanks, Anthony