How would you do this deal?

[Jeff Warner]

I'm looking at buying this to live in, not flip or rent out:

SFH $149k (house in nice, not a fixer) - Price is fair, not a crazy discount.

Seller owes $84k, very motivated and just wants his equity out ($65k). Loan is not assumable.

I have a friend that will loan me $60k for a year at 4.75%, no early pay off, I'll put in $5k. 

I've thought about a Sub2 deal but I've never done one and I'm hesitant. Planning on a refi in 12months.

Here's my problem: I took too many write off's and only show $18k net income so I can't qualify for a traditional mortgage, even though the cash flow is there. Also, I haven't used credit in over 10 years (zero debt, not bad credit at all), building that up as we speak.