seller backed loan, how to execute?

[David Sanford]

I think I have a great opportunity being offered to me, I just don't know how to execute it. a fellow investor ive done deals with in the past has a rent to own contract on a property at $155k. He is offering the house to me at $120k as long as I'll still honor the rent to own tenant at $155k. I'm absolutely fine with honoring that. easy $35k profit... But heres where it gets tricky, the investor said he is willing to carry the 120k for up to 12 months. Now what do I do?? Is there some way to get the house titled in my name and then take a loan against the equity of $150k to pay him off? This would save me the 20% down so essentially I'll get the house with next to no money out of pocket. I was also thinking of seeing if he will sell it to me at $80k on paper so I can save a few grand on the 20% down, and I'll give him the other $40k in 6 months from now when I do a cash out refi. this is pretty difficult to explain, hopefully someone picks up what I'm putting down!