Need help with Major Rehab and Short Sale

[Geofrey Villaruz]

I found 2 properties that need major rehab. I found the owner by looking up in my county records or the location of the property. I then sent the owner a letter that I wanted to buy his property using the yellow letter. He responded! Now, The owner stated that he just wants out but is upside down with the mortgage. the property comparables ARV is at $25k and there loan amount is appx.$60K. I am looking at Repairs at $10K. So this is what my formula was that I can accept if the bank accepts the short sale.
$25K x 65%= 16,250 - $10K Repairs = $6,250 So I am trying to get this property at $5K-$6K. I may have a good advantage and the bank may go with the short sale a very low price since the windows are all cracked or boarded up in different areas and the the interior ceiling is about to fall off. Anyway...
The 2 properties are next to each other and owned by this same owner with 2 different banks.
He has not contacted a realtor and he is willing to work with me to do whatever it takes to preserve his credit.
Here is my question since this will be my first type of deal. Where do I start?