Would you go through with this deal?

[Matthew Tanis]

So I made a mistake with a PA on a duplex that needs rehab and misunderstood how much time I had for due diligence. It needs a moderate to heavy rehab and initial estimate was 35-45k. Actual estimate was higher then we add a contingency budget of 20% on top of that. Purchase price is 101,500 with a very difficult ARV to analyze. There haven't been any rehabbed properties in the last 6 months in this area. Our best estimate is between 165-185k. Smaller duplex 3 houses down that is not rehabbed but in decent condition is 165k on MLS now. Duplex under contract has both units 3/1 with access for shared laundry in the basement and off street parking. This is a C area of town that is up and coming with a multimillion dollar commercial property half a block away. Market rents likely $1350 up, $1400 down, back up plan is section 8 voucher at $1291/unit. Financing is 80/20 for purchase price with business line of credit at 5% for the rehab and the plan is the refi to pull out what we can. Would you do this deal or walk away giving up the $1000 EMD?