Short Sale advice please - is this possible

OK, I have found a house I want to buy, it is in foreclosure and scheduled for commissioners auction. I have contacted the homeowner and gotten written permission to negotiate with the lender. Here’s the problem. My house isn’t selling. So, no cash reserve. I can afford an additional mortgage payment, but I cannot get a second loan with my current d/i ratio. The house I want to buy has an incredibly shady history. Two years ago it was purchased by an LLC for $530,000, sold the same day for $750,000. The buyer never lived in the house and the house is now being occupied by professional squatters. The house needed a great deal of repairs two years ago when I first looked at it, and none of that work has been completed according to the owner. I have no access to the property to prove this however and the current owner lives in another state. I can get exterior photos and show the need to replace the huge deck, but that is about the extent of what I can prove. What options do I have, would an offer where the lender holding the current mortgage would write a new loan with an affordable payment with a three year balloon have a snowballs chance of even being considered and if so, how would I write and present the offer? The attorney representing the lender in the foreclosure has already told me that he can help negotiate the short sale, but is he my best chance or is he only going to work against me in favor of the lender? Thanks for any advice you have to offer.

" I have no access to the property to prove this however and the current owner lives in another state".

If the current owner wants to avoid the short sale, they need to be cooperative to let you inspect the property. If the house has a “shady history”, maybe it has other issues.

I assume from you post that you would be an owner occupant? And that you are currently trying to sell your home? If so, focusing on getting your home under contract, subject to your purchase of a house of choice seems like a prudent business decision. Why would you want to pay two mortgage payments if you could possibly avoid it.

Is this property you want to purchase currently listed for sale?