Is this a viable, and legal, strategy?

[Cole Agnew]

Okay so I bought my first rental property around 6 months ago and am looking to buy another one and I had some questions about financing. The bank that I used for the loan on the first house required me to put down 20% and I am fine with that as I don't want to be over-leveraged. I am going to use the numbers for that house in this example. The purchase price was $140,000, I put 20% down ($28,000) BUT it appraised for $157,500. Since it was a rental property seller concessions were limited to 2% of the purchase price which came out to be $2,800. Would it be possible, and legal, to go to the seller and have offered $157,500 (what the house appraised for) and asked for a check of amount $17,500 for "fixes"? This way I would only have to put down $10,500 instead of the $28,000. I also still wouldn't really be over-leveraged because the house could have really sold for the appraised value, the seller was just dumb. NOTE: my bank would only loan on purchase price sadly, it would have just been much easier if they would have loaned me 80% of the appraisal.