Seller offered $80k, its worth $180k.... now what?

[Account Closed]

Hi BP!

I was driving home from work and took back roads. I noticed a house with a tarp on the roof and the owner sitting on the porch. I stopped my car and asked if he wanted to sell his house. He said sure, if the price is right. To my shock he asked for $80k for the house. Zillow estimated the house at $215k (whatever that is worth). 

There have been some additions to the house over the years, and cracks are visable between where one section and the other meet. The roof probably needs replaced as well. The inside looks fine. 

I told him I would be by tomorrow with an inspector so that I could make him an offer after I know how much it will cost to repair. 

If repairs won't cost more than ~50k, it meets the 70% rule and I can pay up to 80k, right? What if he accepts my offer, do I just finalize 203(k) funding, and go to a title company with him to close? I also noticed he had some lines of credit and mortgages over the years (hes owned the house since '86), will the title company sort all that out? 

Thanks a lot guys. Never closed a deal before as you can tell.