Life Estate Created for a Short Sale

[Owen Schwaegerle]

Hello everyone, I have a tricky situation - looking for feedback advice on how to make this deal work.

There is an off-market seller in pre-foreclosure. The home is probably worth $580K all fixed up, and there is $600K owed on the property. It is a short sale. The seller is refusing to list or sell it. He wants someone to buy it from him and grant him a life estate or lease it back to him till he dies. He is in his upper 70s, so that could be 20+ years.

My thought is, he may accept any price to get the life estate, which would result in a short sale. Of course the short sale is subject to bank approval, but would they counter out any terms about a life estate? Anyone have experience with this? Looking for advice. 

Thank you!