Getting creative on a deal

[Matt Kukulies]

Hey guys, hoping you can help me think through this and come up with the best offer possible. I think there's huge potential here, but unsure how to go about doing it.

Here's the situation: I came across a FSBO on my way home from work. Called, he was asking $79,900, looked at it, and made a cash offer of $66k with inspection contingency knowing that I'd be coming back with a much lower price. He accepted, signed purchase/sell agreement. Day later I had inspection and started actually digging into the details. He bought in 2008 for $72,500, found a wife, moved out, had it under a land contract that fell through this spring. If The property is looking good it'll get about $1,175/mo. It is a manufactured home built in 1975 (a year before an FHA loan will touch it), attached to a nice unfinished basement. On top of that I would be surprised if any there's anyone who would loan for it. I'm thinking It'd be about $20-$25k to completely fix up, really making it shine. I'll have a little better idea when i get the inspection report Monday. The biggest problem is if i ever do go to sell it, it'll still be un-financeable no matter how much i stick into it.

Here's my initial thoughts

1. offer all cash of land value. I think he's going to have such a hard time selling that It'd start to sound more and more appealing as time went on. 

2. Offer to put it on a land contract. Only problem I have with that (and i haven't ran the numbers yet), is since I would still have to fix it up and this will be on a line of credit, I would want an insanely fast payback.

I feel like with the potential of $1,175/mo rent and the owner being stuck in a bad situation there has to be a way to make this a grand slam. I would appreciate any input. Thanks guys!