Chapter 7 BK And Foreclosure
I have a client that is in the Pre-foreclosure stage and would like to sell her home. The appriased value is $235K, but she has mortgages equal to $259K. She has started the Chap. 7 process with an attorney, will this impact my ability execute a Short Sale with the bank? 
From what I am understanding, it seems that there will be a negative cash flow on your end of the deal...even if you negotiate with the lenders to lower the payback, It seems to me highly unlikely that you will profit from this deal. I am also new to investing, so I cannot give you "thorough advice". I only see this as a loss for you. Hopefully someone else can give you more of a suggestion.
My suggestion is to tell her that you cannot buy the house, but you can help her stall the forclosure process.
It will be up to the judge to decide wether or not any deal you work out with her will be upheld.