The Situation:

I recently purchased my first investment property. It was a duplex and the deal was brought to me by a co-worker who is also a Wholesaler on the side. We have been talking ever since and he has been showing me the ropes. I recently got a lead for a house where the guy wanted 60k, I looked on county records found it was a 3 bed 1 bath with 1,100 Sqft. In the area a home like that goes for around 110k all fixed up. What makes this special is it has a 500 Sqft. garage attached and is the only house to have one in the area. I figured the repairs for this place would cost me around 20-25k (Not an the most upside potential, but there is some.) It should also be noted even as a wholesaler for and foremost I want this for my own portfolio. Its only if I don't have the times and money due to my other deals that i will sell this to another investor.

Flash forward to when I meat the seller at his home. It is in good condition on the outside but there are cars everywhere. Immediately I am worried, by looking at his yard I cant tell this man is a hoarder. I step inside and my fears are confirmed. There is barely a path for me to walk through but I can still see a lot the home through all the junk. I don't see mold or anything to alarming. The place isn't horrible in terms of cleanliness or disrepair. The place is just filled and filled with stuff. I go into the garage and that is filled with stuff as well (which explains why all his cars are on his yard).

After we see the house he asks me if I want to see the upstairs. Now, I saw a window as I was driving up to the house but according to city records it is a one story with 3 beds 1 bath which is what I saw downstairs. I say sure and I make my way up the narrow staircase filled with stuff. When I get to the top and turn on a light I am struck. Not only is the upstairs finished but it has a full bath in pretty good condition(also the hoarding hadn't yet reached the upstairs and it was completely empty up there). There was a room to the left with 2 closets, the bathroom straight ahead, and a much larger room to the right with 4 closets and past that was a duck/crawl attic storage area. I found out the 1-2 bedrooms, the bath, and the extra 500 Sqft. aren't included in the city records is because it doesn't have A/C so isn't included in the assessment. This extra area though bumps my possible resale of the house to 140-150k and maybe tacks on an extra 10k in repairs.

Now the problem: He wanted to sell it to me for 60k but then after talking to him more I find he owes 70k on a mortgage. Once I told him if he sold it to me for that price he would owe 10k on the mortgage his demeaner completely changed. I find out as well that all of the stuff belonged to his family that have either died or left and he wants to take it all with him. His dad recently died and left him his house and he is ready to move into it. The max I'm willing to pay is 65k for the house after finding this new addition. I noticed some motorcycles in the garage that could be lumped into the sale. Me and my friend have rebuilt a couple motorcycles and so they could be worth something to me. I think if I can get him free and clear of his loan and he walks away with nothing he would be willing to sell to me.

Has anyone dealt with something like this before or lumped personal property into a contract for a home?