Father-in-Law is Motivated Seller! Advice for Buying his House?

[Brady McClendon]

Hi,

I've been planning on getting into real-estate at some point within the next 6-12 months (I'm currently in the planning, education and saving up cash to invest phase).  However, my father-in-law just bought a new house (downsized) and is getting ready to retire.  He told me that he is going to sell his current house to an investor because he didn't want the hassle of having to walk people through the house and deal with "tire-kickers."  Additionally, he said that it was a plus that an investor can close in 10-15 days, vs waiting for a conventional buyer to close in 45 - 60 days.

The house is in San Diego, CA and would sell for about $1.2 million.  I believe he wants around $1 million for it.  The house doesn't need much work, so I think I would probably be able to just resell pretty much as-is.  I don't necessarily feel completely ready to jump into real-estate quite yet (based on my current knowledge), but I think this deal is too good to pass up (ready or not) and I think I would be capable of figuring things out on the fly.  They say the hardest part is finding the deal/motivated seller and one just happened to fall into my lap here.

What do I need help with?  The strategy:

My thought was that I should ask him if he would be willing to sell it to me. I figured that to incentivize him to sell to me vs. the investor, I would offer to split the profits with him (the $200k) on the back-end, once I sold the property.  There's a reasonable chance that I could qualify for a $1 million conventional home loan (based on my income, debt-to-income ratio and excellent credit score) and I could ask him if he'd be willing to wait for the 45-60 day close on the conventional loan (which he may be ok with, if he's selling to me); however, I only have about $30k to put down (not the $200k+ required for 20% down plus closing costs).  If I can't qualify for the loan on my own, I was thinking that I may be able to partner with someone, or maybe there is some way to use the existing equity in the property to reduce the down payment?  That's were I'm a little fuzzy on the details.  

Wondering if anyone has any suggestions on:

1. General strategy

2. How I can finance the deal if I'm not able to get the conventional loan with the $30k?  Maybe some combination of loan and seller financing would work? (no idea) and

3. I'm not sure about the tax implications of selling to a son-in-law.  That would have to be factored in. 

Any guidance that anyone can give would be greatly appreciated!  I would love to make this my first deal.  I figure it's a little less risky, since I know and trust the owner and he's been there for over 30 years, just not sure exactly how to make it work yet.

Thanks!