Owner Finance: offer & options for pulling out rehab costs from equity

[Ryan Schultz]

Hey BP Friends! This is my first BP post. 

I'm negotiating the purchase of a fixer upper duplex. Motivated Seller is asking 55k. Said he would reduce it to 50k (before he knew about the basement issue) 

Basement wall/footing needs replacement (quoted out at 17k) before any remodeling can occur. I estimate my crew and I can fix it for (3k). The rest of the house needs to be fully gutted to the tune of 12-15k materials only as we will be doing most of the work.

Numbers look like this:

Asking 55K      (Offer? 55k -17k = 38k)

total Remodel costs 20k

quick estimated ARV $120k

My plan is to completely fix it up and refinance under a FHA loan as the owner is moving out of real estate completely.

 questions:

1.Should I go lower with initial offer? or keep it there considering I'm asking him to finance?

2. I need at least 5k to start remodeling process. What are win-win options to look at discussing with motivated seller?

Thank you for your help! Have a great day!