Those are the ones I can get the biggest discount on and make the most money, and are also the most "pain in the butt" for listing agents, and the ones they want to get rid of the quickest.If I were the seller, my primary concern wouldn't be about you backing out -- my primary concern would be that because you hadn't seen the property, you couldn't have put together an accurate cost estimate of the repairs, and if you determine that your "blind estimate" was incorrect, you could very likely be asking for additional concessions.Put it this way, if you over-estimated the repair costs, you're not going to give anything back to me, but if you under-estimated them, you're going to ask for a lower price -- it's a no-win for me as the seller.Now, if you're willing to keep your due diligence very short (less than 2-3 days) and I don't have any other interest on the property, then I have nothing to lose, and I'd have no problem signing a contract with you.

In the meantime, my in-law blew/gambled away a good portion of the money that insurance had paid him.

First, (I won't load you up with questions) your equity established for financing will be based on cots of construction and land or the appraised value, which ever is less, so your opinion as to equity may not be accurate.

Does adjusted home value bring you anywhere close to an accurate value of the home?

As a painful lesson that so many learned in the downturn, it is folly to include the gamble of price appreciation in our real estate analysis.

A small business is not required to adopt GAAP, but what the IRS requires if such accounting practices are not followed is any system which accurately illustrates the business transacted and done so in a consistent manner.

Given your questions, I don't think you have a good understanding of being a lender, so I don't think you'll be able to accurately figure this out on your own.Now, I suspect the payoff you're owed is going to be much higher than the $52K you paid. 

(Only do this if it is not their homestead)I have a different one if I am asking them to take a second for the 20% down payment.Is it accurate to even suggest that an installment sale will likely "reduce your taxes"?  

I have no doubt that what you say is accurate..

Trying to find a magic one size fits all formula or shortcut, and using it, is why many investors fail, and are then forced to overestimate on the side of caution, which rejects good deals, and screws up bad ones, still  misses the mark, and then they will criticize or call out those that are actually accurate...because accuracy can't be done.