Is there a way to offer and buy a property for cash (either private or hard money) then refi into a mortgage at 95% LTV?

You will lose your money.

I would not play around with creative finance in terms of spending time trying to find it because it will end up not being the best use of your time unless you have marketing money and understand the different scripts and way you can help people with seller finance or sub to.

Hire a great real estate agent and let them help you- that's the best thing you can do to make more money. 

Also, since it is nearby the LA county areas, how does earnest money work?

I won't be another grown man's emotional punching bag for any amount of money.

This is tough.Depends on how fuzzy you want the business/family line to be.The only thing I'd be absolutely sure of is that your money has more tangible security than being a "personal loan" EVEN IF you cut him a break on cost. 

Maybe some extra money owed on taxes?

The gurus tell you that you can do anything with nearly no money at all.

He seemed willing to do whatever to get the unit, putting up all the money for a year and extra security deposit, but he did sound a little "car salesman" so that didn't work in his favor.