Best way to finance a dump???

[Matt Moldenhauer]

Ok, so I have the opportunity to purchase a house directly from a person I know. His Brother passed away and he is in the process of becoming the executor of his "estate". When I say "estate" I mean hoarder/dirty/hasn't been updated since it was built in 1958, "estate". I believe the house has potential, but he is way over valuing it. We can swing the 20% down payment and CC's, but not the $25,000 in work it's going to take to redo the 1.5 baths, kitchen, probably a little foundation work, drywall and no telling what else. 

I think if i could pick the house up for $45,000-$50,0000 it would work. This would be a buy and hold property. It should rent around $725ish when completed. It's in a good area. We own the house next door and had it rented within 12 hours of being on the market. 

To throw another twist into the mix, $40,000 is owed to Medicare, which is going to have to come from the proceeds of the sale. 

I believe one of two things will happen. His Brother(the executor) will sit on the house and make the payments because he refuses to take anything less than what he THINKS it's worth or he will be begging me to buy the house to wash his hands of the whole Medicare debt. 

What are my options, financing-wise????

Thanks!!