Essentially, I've been pre-approved by several lenders until they find out one thing, then the $200k I was pre-approved for drops to $60k.I work for Enterprise and my pay structure is that I'm guaranteed 48 hrs per week and make at least $39,000/yr. this is where I've gotten the $200k pre-approvals.However, it's broken down on my paystub as 40 hrs of normal work and 8 hrs of overtime each week.

@David Fritch We are still mulling over the details, I think we will reach an agreement, he wants to do it a slightly different way basically we agree on payment amounts for two years then I owe him the final amount, he's actually structuring the deal to be pretty beneficial for both of us.

I've never dealt with properties on reservations, but from what I heard, you can't buy the land itself, only the structure on the land.

If a wholesaler knows your situation (tradition financing) they will structure their contract so that it works for everyone. 

I'm getting things situated as far as the legal structure in place.

I read that the Gates decision says that if I tear down the old house to build the first two then I lose the capital gains exclusion.My question is: Is there a way to structure an arms-length partnership to buy the house and two lots - allowing the exclusion - but then also allowing me to gain some of the upside of the new home sales?

It may be that they find it easier to budget with something physical in their possession.  

Broker:  Joe, This property is structurally superior to the comparables and has energy efficiencies that dramatically reduce expenses. 

He worked with a property were they made them remove the structure and start over with the addition.

There's a crack in the foundation that has a small leak that doesn't appear structural and there are a few broken windows and no appliances as well.My agent has made the issues with the house obvious as a part of our offer paperwork but with a short sale I'm sure the bank doesn't consider all the problems with the house like a regular homeowner sale would.