Looking for options need help from seasoned people

[Victoria Dennis]

Hi,

I love real estate but am just a beginner.  August of 2015 purchased my first investment  property... a forclosure that I currently use as homesharing with Airbnb and I love it and its going well.  Here's my issue.  My current home is single family home and I bit off a bit more than I should have..... 9 years ago.  Everything has been fine but now as a DOD contractor in Hampton roads my job (that I really like) has had a cut in pay and Obamacare has put me in a difficult time.  So I'm planning to downsize soon.  Due to a number of reasons downsizing won't be wonderful moving to a less desirable place ...neighborhood etc... but I would really just like to have less upkeep and a small payment incase my job changes more or also so I can maybe buy some property in Florida or somewhere I can retire one day. 

So places that would fit into all my parameters are limited.  There is a place in the same community of my current Airbnb townhome.  I could fix this place up and be happy here with a small mortgage etc.  It is not up for sale.. I approached the owner (neighbor) He is willing to sell but he will loose money he bought it at a bad time.  He is ok with coming to the table and loosing about $25,000.00 as long as he gets what is owed on his place. That is more than the townhomes are selling for at this time. He would actually like to move up north. Originally I thought I could make the numbers work because he in my opinion has the prime unit in this community. End unit.... Nice backyard with view of the golfcourse and a two car garage with 4 spaces in the driveway.  Parking in the neighborhood is VERY TIGHT.... so I thought with having the 2 car garage (most units have 1 car and some have no garage) and being on the golfcourse I thought I could get an appraisal for more.  I spoke to an appraiser and he could get about $10,000.00 more for these reasons but the problem is the inside is in bad shape.  He borders on hoarding.... I'm surprised he let me in.  Now I would have to go in and spend a bit of money to make it nice.  Renovation and decorating is my passion/obcession.  I don't mind doing that because I could buy a unit already done and I'd have to change things for me anyway..... yeah I know not the best for investing but I need someplace I can actually be happy with and not just settle and I know this place could be it.   The appraiser said since in such bad shape that would take away that extra value so the most it would appraise for is what the last end unit sold for in 2016. 

Sorry so long winded but needed to explain the situation.  So here are the numbers.....  Neighbor paid $225,000.00 ....10 years ago.  He owes about $200,000.00.  The last end unit sold for $180,000.00.  Originally I thought it was $185,000.00 thought the appraisal could come in for $195,000.00 and I was willing to take the hit for $5,000.00 to get what I wanted. But if it will only appraise for about $180,000.00 at most I can't take such a big hit.    So I was wondering if anyone out there had any type of suggestions?  The only thing I can come up with is see if he would do a short sale and bring the price down and then I could give him a cash incentive so he would then actually walk away with a chunk of money say $5,000.00 or $10,000.00 instead of nothing BUT then he would have that on his credit history?  I don't know how bad this is on the credit or how long it lasts on there?  I was hoping it wasn't as bad as it use to be... anyone know?  Or have any other solution?

Thanks for any help..... Victoria :)