Opportunity to buy Townhouse Next Door - what can I do? (buy & hold)

[Jackie F.]

I'm simply looking for a recommendation on how a deal can be completed.

I bought town house back in Jan 2013. It is a 1500 sq 3 bed / 2.5 baths. I paid $104k (cash deal) and put in about $15k in remodeling. The house was livable and very well kept, but needed some upgrades. 5 months ago, the same unit sold for $122k and had to be completed renovated, all 2.5 baths, popcorn ceilings, new kitchen, on and on. I would value a fully renovated property for about $135-145k and the rentals are $1400 / month.

My neighbor is selling the same unit and was asking $140k. After two weeks, lowered to $135k. The property is clean and well maintained (they've been there for 20+ years). It is simply out of date. It has all new SS appliances but the original laminate cabinets. The master bath was fully upgraded, but the other 2 are original but in very well kept condition. Upstairs has carpet in great shape (I would remove anyhow) and downstairs they did install 18" tiles throughout. My neighbor does not have any loans on the property and owns outright.

I want to make him an offer but don't have the means to do it. I talked to him last week and can sense his desperation to sell. This is a good opportunity for me for me living next door. I did all the upgrades on my home myself and for renting, this unit only requires minor upgrades. My credit is recovering from a short sale I completed in Dec of 2013. So standard lending is not an option.

My cash supply is limited and nowhere near the asking price. What creative ideas outside of seller financing (that would be my last option to make him an offer) can I use to purchase this property? Remember, I don't have a mortgage so a) My savings is building up quickly or b) I can pay off a loan quickly with rental revenue and personal income.