Get an item of value into each of their hands every 3 months (small gift).I am also a proponent of geographical farming.  

I have traditional (school) as well as self educated.

(Traditional financing is off the table so its harder for them to sell)You may even find someone who is open to seller financing that way.

We don't have the credit and we don't have a large sum of money available either so I think we're just stuck untill we get one of those key items.

This is also how I would sell him on the deal.Estimated Minimum Closing Costs $5,500.00Estimated Closing Costs Based on Prop Value $5,500.00 Repairs/Construction $10,000Total Loan with Seller Concessions $100,000.00 % Down Payment 20.00%Down Payment $20,000 Remainder of closing costs $15,500.00 (this assumes you are paying for the renovations out of pocket)Total Due at Signing $35,500 Mortgage Rate 4.75%Length of Mortgage in years 30Monthly Mortgage payment $417.32 Taxes $100.00 Sewer and Water $- Trash $- Heat/Utilities $- HOA $30.00 Cap Ex and Ops $150.00 (this is your future roof replacement, hot water tanks and other major items)Insurance $250.00 Mgmt Fee $140.00 Vacancy $113.40 Total Expenses $1,200.72Total Revenue $1,400.00 Cashflow/month $199.28Cash on Cash Return 6.74%

Increase the purchase price by the amount of the repair and then include the repair as an escrowed item to be paid by the seller.Example: Say you're buying a $150K property for $100K cash, with closing costs $5K, and septic work is $5K.

Since he specializes in REO properties he doesn't do traditional real estate.

Union Savings acts more like a bank, so those items come into play.

Cap ex ask your accountant, in many cases you may have a choice whether to capitalize or expense a given item.  

I learned about self-directed IRAs so I moved a traditional IRA I had over to self-directed and bought a rental with the funds.