Seller's counter-offer. I really hate the terms!

[Amanda Lee]

Hi guys,

this is my first ever post to BiggerPockets. I want to say I love this site, the podcasts, and all the great advice.

So, I'm trying to purchase my first investment property. I'm really excited to have found a 2 family that isn't a piece of junk and just needs some cosmetic touch. so here's the deal. I made an offer, which I thought was extremely fair for both us and the seller, and the seller's counter offer sucks! I gave him an offer based on the comps in the area but I'm just really boggled at his terms.

(keep in mind this is seller financing)

Here's my offer:
Selling Price: 20,000 (It's in an up and coming area in Virginia)
Down Payment: 5,000
Interest: 5%
Duration: 5 years

Seller's counter-offer
Selling price: 22,000
Down payment: 10,000
Interest: 5%
Duration: 5 years
CREDIT REPORT (my credit is good and I have plenty of disposable income each month)
$500 of warranty (which is $640 yearly)

My OBVIOUS or OBLIVIOUS (haha) questions are:

1. My deal makes him more money, WHY is he asking for 10K?
2. if I had 10k to put down, I could buy a WAY better property in the area, is he insane?
3. How do I negotiate the down payment to be lower and get him to accept my terms? We are communicating through our realtors.

A little about the house:
2 family, as stated earlier
Kitchen: no stove, no oven, needs complete update, it's hideous
PAINTED HARDWOOD FLOORS. UGLY.
horrible paint job overall
no heating system. gas heater was taken out (which makes me wonder, because it's not foreclosed)

I have not yet had the inspection done but I have an AWESOME inspector who will rip this place apart (figuratively) if I tell him to give me every detail to deduct from the selling price.

A little about me:

1. was just approved for a $15K line of credit I was going to use as a reserve to pay for updates and appliances (I want to pay most out of pocket though)

2. 5K to put down.

3. another property I want on the same street is 9,000, needs about 25k in repairs, but is really nice, but one family. My partner and I like that one too and were considering tapping into the line of credit to pay for it.

Please help me guys. This has the potential to be my first baby. I have dreamt about investing in property since I was a little girl. I don't want to give this 10,000 AND my credit report!

[Michael Wagner]

He wants the 10K down to protect his interest in the property. This is also why he wants the credit report. I think you will likely have to give him the credit report (I wouldn't hold paper without requiring that either). The best success I have had in negotiating a lower down payment is to make it clear to the owner that while you understand that 5K down might be a bit thin for his liking, the truth is that you will be investing 10K or more into the property immediately upon closing (5K down and 5Kplus in rehabs). He doesn't have to know that you might be able to do it for less than that. And make sure he knows that while you have good income the 5K plus 5K is ALOT to you and you would never walk away from it. I think that if he is really a motivated seller that sales pitch could very likely get your down payment to where you need it. Give him the credit report as "his win". Hope that humble two cents helps!