You could possibly double close on it, but most short sales have deed restrictions these days preventing the resale of the property for at least 30 days and sometimes as much as 120 days. 

The P's apply here -- prior proper planning prevents...

The plan was that we were going to shed all of our unnecessary monthly bills and live bare bones and drop all of our extra money into renovations.

Also the statute of limitations will not affect how long the mortgage may be listed on her credit report – generally for seven years.Until you are certain that you will not be foreclosed, pay only the minimum property taxes necessary to prevent property tax foreclosure.

Mike Flavin in my opinion the core issue is not "how much of the deposit is withheld at move out to cover damages," but rather, "how much damage is prevented by collecting the a deposit at move in."

So my question is to you is this something that could work or is there internal policies that they have to follow that would prevent them from doing this?  

Aside from the basis issue that would make a 1031 unnecessary or not that beneficial, would a recently inherited home qualify based on the holding for profit requirement?

You don't necessarily need to do a full blown professional inspection but you are putting yourself at unnecessary risk if you do not at least go in it and look around.There really isn't anything about buying cash from a wholesaler that needs to be different than when you use a realtor.

Kenneth makes a good point but you do not want to saddle yourself with unnecessary expenses either.

I am not of the people, only looking for guidance.It is not super complicated but it is risky and I am not sure how to go about it 100% and what the best ways are to prevent any problems.A person wants to sell his house and a potential buyer offered to the current homeowner that they would pay him a lump sum of cash upfront, and then pay off the rest with a set monthly payment within a 5 year period.