Need advice on quick funding for cash purchase

[Jay Sebastian]

Hello! I've been all over this website for the past several months and I love the advice I find. I've even contributed where I can from time to time. :)

Hopefully I can get a little advice on this opportunity.

Subject property (on Lake Oroville, CA) is a beautiful 2/2 "cottage" with a lake view in a highly desired neighborhood. Initial asking price, 87.5k. Area took a hit, but is starting to recover.

Seller needs 85k to break even (mortgage, Realtor, taxes, etc.) on the deal. He's a bit gun-shy because two previous offers went into escrow and almost closed, but both fell through at the last minute. He's looking for a cash buyer.

Enter the buyers - they loved the property, but were heartbroken when they discovered that it was in escrow. They saw this property as a chance to hold as a rental for a few years then downsize into when the time was right. They asked the listing agent to let them know if something fell through. Well, it did - today.

The buyers are waiting for a home they are selling (one of their parents) to close - it will close any day now. Almost zero risk of the deal falling through. At close, they are expecting to get 60k cash. They need another 25k.

I've advised them to look into a transactional loan, since the equity position for the lender would be huge (~29% LTV) I figure it would be a pretty low-risk loan. They don't have good credit, but have stable income and own their primary residence (but pay a mortgage).

I spoke with the listing agent today and we discussed the seller's fears and the buyers are willing to give good earnest money and help with the mortgage payment he has to pay due to the deal that fell out today.... if he can wait until the money gets pulled together. That should only take a week, maybe two.

I'd loan them the 25k in a heartbeat if I had it liquid......see, the buyers are my parents. I can borrow the money as I have great credit and good income, but I want to be sure I'm thinking through all of the options.

As soon as they get the property they plan on paying off the 25k via HELOC and/or an annuity payment that is due in a few months.

I've brainstormed with some amazing people on BP and I've learned so much. So - what am I missing?

Thank you all!