Avoiding PMI with instant equity in home?

[Katie Sylvia-Shea]

Hi all!  My mother is simplifying her assets and I am trying to figure out a  creative way to purchase her home that will be beneficial for both of us.  The home is outdated and has a lot of value to be added by repairs, however, it is in an increasingly expensive market (central coast California) and the house is worth much more than I was planning on paying for my first property.  What I would like to do is buy it for what she owes ($350k), owner occupy while I rehab it, and cash out refinance to pay her what she would like to make from the sale and myself for the rehab.  I estimate about $40k in repairs and the after repair value in the current market to be in the $550k-$575k range.  

My question is this: Is there a way to avoid paying PMI in this scenario without putting 20% down? I am pretty familiar with the way PMI works in typical circumstances but was hoping someone might know of a way to not pay given that the sale is between parent and daughter and that at the initial purchase I would have more than 20% instant equity in the property.

Also, any other feedback or advice on this scenario would be super helpful!