How to Buy: Distressed Seller on verge of Foreclosure

[Charles Schram]

Looking to write an offer on a distressed property where agent told me homeowner is on the verge of foreclosure and will reduce it another $50K less on an already reduced asking price. I plan to offer another $50K less on top of that. Question: Is there a smart play here for seller financing and doing rehab (or any other plays when dealing with a pre-foreclosure)?

Was originally priced at $385K. Price reduced to $350K. Owner paid $392K back in 2020, and agent says he truly got screwed in her opinion. Owner’s mortgage was $2100 and bought if for. It was rented out for $1500.

From agent: “It’s perfect for anyone looking for a vacation home, rental, Airbnb. It just needs some work or maybe an extra bathroom would be the key.”

As an architect, I’m happy to put ~$50K of work into this if I can finance it. Only looking to put 5% down max. 

Plan would be to treat it as a primary residence with conventional loan and possibly an FHA rehab loan to do some upgrades and bath addition, then refi then and roll into a short term rental at ~$3000/month+. Goal is to stop paying rent in Los Angeles and start BRRR'ing and BRRSTR'ing.

Looking for opportunities 1-2 hours surrounding Los Angeles for under $350K to do some level of a house hack (although don’t want to rent in same unit so duplex+ is preferred) or live in it for 6 months then rent out and repeat  

Appreciate any and all thoughts!

Thanks! 
Chad