How to tap into Initial Equity of a property

[Kelvin M.]

My wife's family is looking to sell their old house at discounted price to us. They are renting it out as of right now for $850 a month, which is about $100 to$150 less than what they should be getting for this home so the property does not have cash flow at a purchase price of 100,000 for us. But what has me think is how I could tap into the total initial equity of the home at this price. Anyone have any ideas if and how this could be done. 

Purchase Price: $100,000.00

Purchase Closing Costs:	$2,500.00
Estimated Repairs:	$0.00
Total Project Cost:	$102,500.00
After Repair Value:	$120,000.00
Down Payment:	$20,000.00
Loan Amount:	$80,000.00
Loan Points:	$0.00
Loan Fees:
Amortized Over:	30 years
Loan Interest Rate:	4.500%
Monthly P&I:	$405.35
Total Cash Needed By Borrower:	$22,500.00

Monthly Income: $850.00	Monthly Expenses: $840.35	Monthly Cash-flow: $9.65	Pro Forma Cap Rate: 4.15%
NOI: $4,980.00	Total Cash Needed: $22,500.00	Cash on Cash ROI: 0.51%	Purchase Cap Rate: 4.98%

Total operating expenses:	$435.00
Mortgage expenses:	$405.35
Vacancy:	$42.50	Repairs:	$42.50
CapEx:	$85.00	Insurance:	$80.00
Management:	$85.00	P&I:	$405.35
Property Taxes:	$100.00

Financial Info

Income-Expense Ratio (2% Rule):
0.83%

Total Initial Equity:
$40,000.00

Gross Rent Multiplier:
9.80

Debt Coverage Ratio:
1.02