I have an ETHICAL DILEMMA!

[Brandon Ingegneri]

Recently, I purchased a duplex in Warwick, Rhode Island for well well below fair market value.  The property has all of the heavy lifting done, windows, mechanicals, roof, electrical, etc.  The interiors are sound, but dated.  The property is fully occupied, and is performing well. 

We threw the property on the MLS just in case we got an offer that we couldn't refuse. That offer did in fact come in, but with conditions. This is a 203k buyer, and they want the building completely empty at the time of the closing. One of the tenants is an 83 year old man who has been living there for 15 years. He offered us 40k below the offer we received on the MLS.

I certainly want to get the most for this property, but at what cost?  I certainly have no intention of booting a nice old man onto the street as winter approaches.  It is just not an option for me.  I was going to see if he wanted to match the offer as an alternative, or offer to pay to have him move into a building that we are finishing up renovations on for the same rent he is paying now.  

Other than these two options, what other alternatives do I have?  I am kind of stuck between a rock and a hard place if he isn't open to the two alternatives that I have already considered. (It should be noted, the sellers are adamant about the property being vacant.  I already tried to negotiate one side bing empty and keeping the elderly man in the unit).

[Brandon Ingegneri]

Here is how the deal ultimately panned out.  I met with the tenant in person today at his shop.  Just by chance, his daughter and brother happened to be there, so we got to have a productive discussion.  He is still a successful business owner, and understands business decisions.  I was pretty adamant that I wanted to do something to lessen the blow, and he and his family were very appreciative of that fact.  I didn't simply tell him the cold calculated reality of the situation without trying to do right by the man.  

I told him the offer that I got and that if he even came close to it that I would sell it to him.  His max was a cash offer still 40k below the offer that I received.  I offered to rent a building that we will be finishing up a complete renovation on, and even offered to pay for his move.  He was thankful, but it was in a different town, and he ultimately did not want to do that.  

He looked me in the eye, shook my hand, and thanked me for coming to talk to him in person.  At the end of the day, he understood that I took him into account in the equation, but understood the position that I was in.  So ultimately, I feel much better about the situation.  

Regardless, I want to pay for his move.  A small gesture like that will go a long way.  Some people here may think Im nuts, but in all honesty, I really don't care.  If I can help a nice old guy out a little bit and he is from the old school where he will appreciate it and doesn't feel entitled, Im doing it.  

After that, I had the agent inform the potential buyers that we had multiple offers on the property and that they should present their highest and best.  They cam up $6500 from their initial offer that was $40,000 higher than the old man's.  Ultimately, this will be a success story should it make it to the closing table with a total profit of $106,500 not taking into account the rent that I have previously and will collect prior to the closing.  

Thank you everyone for your advice and insight.  Some of the responses about cutting the cord on the old man though... wow.  The respect and values that this country's greatest generation helped to instill have seriously eroded. That is a conversation for another day though.