Short Sale potential deal

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Hello,
I have started receiving my first responses from a mailer I sent out to people whose SFH loans are being foreclosed on. I got the names and addresses from a foreclosure newspaper here locally. The woman told me the following:

-She bought the house for for 171,500 in 12/06.
-Her loan payoff is about $151,000.
-She says it needs some work, but mostly cosmetic.
-She says the payments are 1,500/mo. PITI. Taxes are current.
-She says the Sherrifs sale will be on 1/22/08.

I am trying to make this a first one to see if I can make an offer that would make sense, knowing that it might just be a learning experience.

I think values have gone down by about 5%, so let's say the deal is as follows:

Market Value: 163,000
Rehab Cost: 5,000
ARV: 158,000
70% ARV: 110,600

Short sale needed: 40,400

Is it possible to get qa bank to accept a short sale to this extent? Would I make a subject to offer to the seller for the amount of her loan, subject to the existing financing, and contingent upon being able to get a short sale done for $40,400?

Then, is there enough time to actually do the short sale and identify a buyer who would take this deal for a wholesale assignment fee? Mnmoney, what do you think? Thanks, Mike