HELP!!! Need idea's for owner carry financing deal

[Jeremy Jackson]

I looked through a house recently in a neighborhood that I'm always watching.  Great neighborhood and houses are appreciating there.  The house is listed at $150k.  Was previously listed at $160k.  Arv is $180-189.  House is solid but outdated and would require about $20k worth of upgrades.

I looked up the owner through tax record website.  Found them on facebook and we chatted for a while.  They are motivated to sell.  Their monthly mortgage is $1200 per month and about $125k payoff on their mortgage.

I'm interested in doing a live in flip, staying there 1.5-2 yrs, updating along the way, then selling.

I have the ability to use a second VA loan but it has to be $144k minimum and this house isn't worth that to me.

I could go FHA but really want to keep my cash free while looking for other buy/holds.

I've never been in a creative finance or owner carry deal.  What can I offer?  Recommendations?  I know they want to sell and they contacted me again today, despite having an agent.