Struggle to find our First Deal from a YL absentee owner list

[Amy V.]

Seller is a 70 year old man, bought this property new for $144,500 in 1995, ARV is probably in the range of $275K to $285K, B to B+ neighborhood (6 mos comps are $250K - $310K).

He owes $106,000 on a refinance and rents the house for $1300 a month. He got our YL within an absentee owner mailing list, called, and he wants to work with us. Seems like a traditional sale for him would net about $140,000, if no repairs/work is needed. 

He doesn’t want to be a landlord anymore (he has property management), and he believes the current renters are going to leave because of a job loss. He says because he is old he wants to get rid of it, and he doesn’t want to list it with an agent. Also, his wife is in a mental institution with dementia (she’s not on the title). He says the house only needs cosmetic work like painting and floors, though of course we haven’t seen it yet.

He knows we are investors, he doesn’t HAVE to sell, but we’re trying to figure out if there is someway to work this out that’s a win-win. He is open to all options, for example his getting some kind of monthly payment, but what we don’t know yet is what his bottom line is. We have a phone call coming up to address that, but we want some options to offer him that might affect what he’s willing to accept.

Because we are not sure what kind of deal we could make, we don’t even know what would be reasonable. Could we do this subject to, get the renters out, do a traditional sale, pay off the loan and then give him the cash we negotiate, with some left for us, like maybe he gets $120K and we get 20K (minus whatever we put in for improvement, say 5K, so 15K net). Am I thinking about this is the right way at all? 

We have some cash, access to elbow grease for any work on the house, and great credit in case any financing is involved (but of course we're trying to avoid that). I provide this info as a preempt to those types of questions, if they are pertinent.  We accept that this may not be something that will work out at all, if that's the simple answer.

Any suggestions on how we should be thinking about this? THANKS!!