$10k to purchase option at $420k, house worth $525k+ = Good Deal?

[Orion Walker]

Hi BP Folks,

I'm a buy and hold guy presented with what I think is a good looking wholesale option. Is it?

The distressed seller wants $10k for a six month option to purchase at $420k. As is I would say it is worth $475-500k. Fixed up a little nicer it could go for closer to $600k. 

The only significant catch on the deal is that the seller might insist on being able to stay in the back unit for 6 months after sale. 

I would buy the property myself, but I'm just not sure I can swing that right now, so looking at wholesaling it. I have a pretty decent local network, so I feel pretty confident I can find a buyer. 

Does this sound like a good deal? 

Suggestions? Things to look out for? 

Thanks for any/all input!