Buyer Found At Open House

[Bobby Holley]

My wife and I recently showed up at an open house the same time as another family.  I found out that the family loves the neighborhood and they love the schools that feed that neighborhood.  Their purchasing budget is $280k - $300k.  The comps in the area range from $220k - $280k.

I have a friend in the same neighborhood who needs to relocate to Charleston, SC because of his job.  He is already working and living in Charleston and his wife is trying to sell the home, preferably by June.  They want to sell the home AS IS because they don't have enough time or cash to do what's necessary (and they want to keep the agent commissions to themselves).  Their AS IS asking price is $200k.  We estimate they would have to spend more than $30k on renovations to make it an attractive purchase on the retail market.  They currently owe less than $120k on the mortgage.

My goal is to buy the house from them while simultaneously receiving a bank approval letter from the aforementioned prospective buyer on a purchase price that meets their budget and our desired return.

I want to avoid going the hard money route. Right now I have been approved for a HELOC that would provide about $24k for a downpayment which means I would need to finance an 85/15 LTV just to get a $160k loan. My ideal scenario RIGHT NOW would be to offer $160k to the seller, offer the prospective buyer $30k - $40k in renovations of their choosing in exchange for a purchase price of $260k.

Any creative thoughts on this deal, financing, etc I would love to hear them.  Thanks.