Hello @Susan Clark
See if he will do Seller Finance. Terms can be very flexible and easily designed to make it a win - win. Low down payment, make interest only payments with ballon payment after X years. No restrictions (I.e. Due on Sale clause) or appraisal inspection required.
First try to find comps for that area to make sure $75K is a good purchase price (preferably it should be low). Confirm area rental market rates so you know if increases are possible.
Have you completed an initial Cash Flow analysis based on his income/expense data? Post the numbers here if you would like a double check on it.
You say you possibly increase profitability. How? Renovation and upgrades? I would make sure you can go through the property with a general contractor to identify all Rehab and future CapEx requirements. It will help you get a discount on the property.
Later you can refi to a conventional bank loan with 30 yr mortgage and low interest rate. You must make sure you do not overpay for the property. The bank will require an appraisal and will only give you a loan of 70 - 80% of the appraised value. Example: Appraised Value is $100,000. Loan would be $70K - 80K. Obviously if appraisal came in at $75K then the loan would only be 52.5K - 60K. You see your dilemma.
Bottom line. Verify market price for the property and rent rates. I'm sure you can make it would. Hope this helps. :)