What to do with this Foundation Issue deal.

[Kirk R.]

I am qualified for a VA loan. So the property I pick would have to pass a VA inspection & I would owner occupy and rent out some rooms.

Viewed a 3/2/2 with listing agent.  House is something I would like to live in and could rent out some rooms.

Seller did some updates that look they were done well:
Furnace & A/C
Windows
Doors/Storm Doors
Bathrooms
Roofs - house and detached garage
Siding

Numbers
$85,000 List Price
$85,000 Fair Market - IN Excellent CONDITION
Stuff I can estimate:
$2,000 - Flooring Replace
$2,000 - change from fused 110 to 220
$1,500 - kitchen cabinets refaced and counter tops
$500 - Add garage door opener
$6000 + $4,000 my effort use of my cash
$75,000 FMV

Seller has had it for 2 years unoccupied.

The block walls were starting to push in so in 2001 the seller had a company put an Anchoring system to hold the foundation (looks somewhat like a factory in the basement with the screws and plates sticking out of the walls).   IMO why this house is stuck on the market.  All the blocks in the walls are starting to crack at the seams where they meet.  & the house had a dewatering and sump pump added.

I think I could get this to pass a VA inspection - yes i know VA is pretty tough.
If I went to sell it - I think it would always have to be sold at discount.

FMV is $75,000 above fixes and my effort - FMV - less $15,000??? for the issue with the basement. $60,000 FMV. I don't want to buy something at fair market value. I want a deal. Although renting the rooms would put it at about the 1% or higher if I paid the FMV.

I could offer the seller $40,000?  When he is listed at $85,000?   I pretty much told the Realtor - basement too scary - maybe later - meaning maybe later this winter when seller is more motivated & if I don't find anything better.  Any input appreciated.