Plan of action on property

[Terry Royce]

What should my plan of action be for purchasing this rowhome?
Asking: 49k
Owner will accept: 40k
Needs about 8k to make rent ready
Needs about 20k for retail
ARV: 125k

I want to buy and hold as a rental, however I do not want to get stuck sitting with a HML @15% interest and I know most lenders won't lend on a property under 50k. Is my only route to buy with HML and refinance? That would eat up another 3-5k in closing costs. What are any other possible options.

Thanks