Last week when I took a walk outside she was doing some planting outside and we had a conversation.She told me she's going to move to the NE to be closer to her kids, and will be selling the house. 

Can someone walk me through wholesale/fix and flipping a foreclosed home? 

There are plenty of people who will walk you through the business for free -- read the education section of our beginner's guide for more info -- http://www.biggerpockets.com/ubgGood luck.

I want to figure out how to go about this deal and walk away with a win for the both of us. 

I'm a firm believer and doer in creating win-win situation, so we both walk away happy and wanting to work with one another again.

Go and visit, walk around, talk to people, become a local-even if only for a short while, stay for a few days.  

Walk them thru what you expect.    

It was either seller finance or walk away.You'll find too that the lease-option and contract for deeds go back to this era of real estate financing as well. 

That cement path that wraps around the prop and the walk way toward the door... if you have enough, perhaps brick those.

Also determine your walk price and stick to that.