creative financing for a deal with a seller in a unique situation

[Bruce Clark]

I'm looking at a duplex. Asking price is 62k. This is unrealistic. Property is empty. Sellers used to live in the property - they used both sides. Property has been on the market for 97 days. Sellers now live in Florida to be near grandchildren. Realtor told me that when they first put it on the market, the electric was turned off and the pipes froze, which caused major leaks on one side. They immediately had a restoration company take care of the issue, but then their insurance company denied the claim because the electric was not on. So they now they are on the hook for the restoration companies bill and it hasn't been paid yet (I will of course check for mechanic's liens when the time comes). They also took a loan from a relative to attempt to make other repairs, so now they have an empty property in a different state. They have a mortgage, owe money to a restoration company, and owe money to a family member. Realtor "says" their break even point is $59,000 but seemed to indicate that they would consider any offer.

I haven't walked the property with my contractor yet, but my rough estimate is that it needs about $30k in repairs and upgrades. 

Once the property is rehabbed it will command approximately 1,300 total rent. 

I have ran the numbers (taxes, insurance, cap ex etc.) and I can make it work by simply offering $40,000 and seeing what they say. Given their situation, I am not sure if they will accept or not.

I am wondering if anyone has any creative financing ideas that may work in a situation like this.