Complicated deal for rental. Thoughts?

[Mark Ferguson]

I had a owner contract me about doing a BPO, long story short I may buy his house, but it is very complicated.

He has a 1st loan with Citibank with $46,000 owing and $440 payments including taxes and insurance. He is current with this loan.

He has a 2nd that was assigned to SLS from Green Point that was $75,000 Heloc that is in foreclosure, balance owed is around $80,000

He has negotiated SLS to take $13,000 on the 2nd as pay off, but they won't sell or assign the note.

ARV is about $140,000 with $25,000 in repairs needed.

He has a $12,000 credit card judgement against the home, but he is going through bankruptcy and my lawyer said that will disapear off the house once his bankruptcy is completed.

He wants me to pay him about $3,500, pay off his 2nd for $13,000 and take over his first. He then wants to rent place back for a year for $700 a month and then for a second year for $900 a month. It would rent for $1100 to $1150 after repaired.

He doesn't want to sell the house until his 2nd is paid off because it is supposed to got the foreclosure sale soon and he may not have time. He wants to me to pay off the 2nd then buy the house from him so he walks away with $3,500.

My thoughts are to pay the 2nd off and in turn have him sign a Deed of Trust to me in the amount for the payoff that goes against the house. Then buy the property from him for $51,000 or something, pay off the first, get a new loan 20% down, pay title insurance, recording fees, and leave him enough to get $3,500 back. I can rent it to him for a year without making any repairs and then reconsider after that first year.

Is my thinking correct or am I missing something or a better option? I have not done a deal like this before.