Pre-foreclosure offer and legal end

[Eric Burgh]

Hi All, I've been casually browsing this site for a few years and first time posting here.  I have some real estate experience but still a beginner as far as I'm concerned.  I'm also pretty handy but by no means a contractor, but still could do better work than some of the hacks out there.  I bought a fixer upper about 8 years ago and did all the work myself and learned a good deal along the way.  I still have that property and if all continues well, should be a nice return when I sell.

I'm looking to get some feedback regarding legality and the reality of this plan rather than the actual numbers.  I have a unique offer on the table to get involved with a friend/potential partner (who is a new real estate agent).  He knows a woman that is about to lose her house, possibly by the end of this month.  (Hasn't paid two years of taxes - which NEEDS to be paid this month, has a 80k home equity line out, IRS, and other bills.  Total outstanding debt is about $140k).  She is very interested in selling the house to us and trying to sell it for "cheap" if we let her live in it for a few more months - which I could be okay with if I start with the attic and basement renovation first.

I already saw the house, and realistically I think it's worth 150-160k for an investor, 190k for someone looking to live in it, and she wants $220k which is way too much if I want to fix and flip.

I don't think we can pull off, and we don't want to buy the place up front for $160k.  If we don't do anything, she's likely going to lose everything and have to file bankruptcy.   Can we make an offer in which we pay the property taxes and the home equity loan (about $100k or $110k including IRS), in exchange for the title to the house?  We would let her live in the place for a few months (amount tbd), and then have a back end deal or even in the contract that upon our sale of the house - when we sell next spring and for $250k or more, she will get the remaining $50k?  So essentially she gets $160k for the house after we sell, her debts are paid, she has a place to live a few months, and we didn't have to fork over all the money up front. 

Is this sort of deal even possible?  I also think the likelihood of her agreeing to these terms is slim.