Is the seller being stubborn or am I?

[Brendan Carlson]

So I recently put an offer in on a SFH and it was accepted for $3.5k less than the list price. It's a cozy 2 bed, 1 bath with a shed and a huge yard. It was marketed as turn-key with recent renovations (kitchen, carpet, paint, water heater, 4 year old roof, etc). It was going to cash flow about $170 per month. Seemed like a great, low-risk home for my first buy-and-hold investment property. However, during the inspections, many hidden issues were revealed: structural issues found in the crawlspace, sink drainage issue due to debris and tree roots, mold in the attic, cable feeds with exposed wires, dips in roof, torn roof vent boot, front porch needs shimming, and a handful of other minor issues. Additionally the electrical service panel will need to be replaced soon as it is old and not up to standard, and the shed is unfinished. I got a ballpark estimate on what it'd take to make the home livable and was told $2-4k. This does not include the service panel and the shed ($2k).

Because of these issues I amended my offer to be $3.5k lower than what was originally agreed upon. My thought was that, while my mortgage would not be much higher with the initial accepted price, my CoC return would be lower than I initially had anticipated since I'd be putting my own money into the repairs, and when I eventually sold, I would not get that repair money back. Though, if I lowered the offer price, my CoC return would still be lower than anticipated, but at least I'd get my repair money back when I sold in the future (the area I'm targeting is known to appreciate slow but steady).

The seller did not take this well and outright rejected. He didn't even make a counter offer. My initial thoughts were just to drop out of the deal. But now I'm second guessing myself. Is $3.5k really that much in the long run? Should I ask the seller if he'd be willing to meet in the middle? I've spent a lot of time on this property as well as a bit of money on the inspections, so it'd hurt to walk away.

I remember on a podcast where Brandon Turner was talking about walking away from a deal if the seller didn't accept his offer, then checking 2-3 weeks later to see if the property was still on the market and submitting the same offer again. Should I use this strategy, or should I try to negotiate with the seller?

I'm pretty green with all of this, so I'd appreciate any and all advice. Thanks BP community.