Yellow Letter worked. Now what?

[Curtis H.]

Meeting with a seller tomorrow based on Michael Quarles' advice on marketing to 65 and over with equity.

Home worth $450-500K as it sits now.

Owner bought in 1988 so nearly paid off.

Took $125K loan out on home 5 years ago.

ARV on this home is probably about $600K after $25K worth of improvements.

I only qualify for $415K or so conventionally, nor do I want to go that route. I will live in the home as an OO.

Seller's motivation level is medium. Wants to build a custom home that will cost $300K or so in a place much less expensive.

What is a good way to structure a deal?