Is this worth walking away from?

[Jessica Meehan]

Hello,

I am currently in the process of buying my first buy and hold investment property. I am in the York, Pa area and the purchase price would be $25k with an additional $3k in closing costs. The unit is a 4 bedroom 2 bath currently being rented out at $800/month. This in an all cash purchase with my property taxes being $167/month, homeowners insurance $58/month, and if I continued with the current property manager $60/ month. This would give me a positive cash flow of $515 as I already a couple months rent set aside in case of a major repair.

Now the issue came down to when I got the house inspected prior to closing (which is the 15th of this month). The inspector found that the asbestos roof was in dire need of repair, there was live knob and tube wiring, the furnace wouldn't fire up and had some duct work that needed to be fixed, and several ungrounded and dead outlets. There were some other minor repairs but nothing that I felt like I couldn't handle such as fix some siding, paint, ect. I asked the seller to repair my list of major repairs as it would cost me approximately $8k, thus eating into my budget. In the area, there are alot of foreclosed homes and I feel that if I'm going to do any major repairs, I rather buy a fixer upper for a lower price and put the equity into it myself.

The seller came back with a counter offer of just fixing the furnace and replacing two dead outlets. The listing agent stated that he was into the property for $30k and that's what he needed to bring to the table at closing. I call bull as the last purchase price was for $18k and it seemed like the previous owners did the updates. I decided to walk away.

The question is, am I wrong? This property is rented out, the property manager stated that even though the tenants were only in this property since Jan, they've been with the property management company for 2 years and there has never been a problem with payment or damage. I just don't want to eat into my budget and be into this house for potentially $36k as the resale value is $37k.

Thanks in advance for all your insight.