Going to Tax Auction

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Hi all. Long time reader and sponge here, second time poster. I'm looking for some seasoned and creative advice on how to best approach this deal:

Seller's home is set for tax auction in less than 60 days. Owes 76k on a note and an additional 80k in accumulated back property tax and an IRS lien. Comps are 205k with roughly 15-20k in needed repairs. 

The seller is ready to walk for what he owes if he needs to, but also mentioned that he is willing to sign the deed over for what he owes in back taxes and liens and continue living in the home. 

The margin is slim for a wholesale or flip but I think there is deal to be made.

How would you approach to create a win-win?