If this is a re-sale, you should have conducted an inspection, and that inspector, should have caught the defective plumbing material and brought it to your attention to make the necessary steps to have this issue remedied, compensated or allow you to exercise the ability to walk away. 

Make sure to back out any of the owner contributions or any other thing that he compensates himself to come up with a good number.

@Chad BaileyThe following IRS document sheds more information on the ROBS 401k program. https://www.irs.gov/pub/irs-tege/robs_guidelines.pdfAlso, here is how the ROBS 401k program works in a nutshell.A new C-corporation is established.Corporation sponsors a new 401k/PSP.The IRA funds are transferred to a new brokerage account opened for the 401k/PSP.The new real-estate corporation issues stock shares to the 401k/PSP for the benefit of the participant.The 401k participant must be an employee of the corporation and he or she may take a reasonable salary.The corporation owner's family members may be employees of the franchise business and receive reasonable compensation for their services.To the extent that the corporation generates profits and elects to distribute those profits to the owners of the business, the percentage of the profits associated with the shares held in the 401k/PSP will flow back to the 401k/PSP brokerage account.

They deserve to be compensated for their work, even if its not from you.  

Although we have a formal mentoring program here, wherein a mentor is assigned and you both agree to a service/compensation arrangement,  I never used it.  

Here is how the ROBS 401k business funding arrangement works:A new C-corporation is established.Corporation sponsors a new 401k/PSP.The IRA funds are transferred to a new brokerage account opened for the 401k/PSP.The new real-estate operating company corporation issues stock shares to the 401k/PSP.The real-estate operating company must be an employee of the business and he or she may take a reasonable salary.The business owner's family members may be employees of the business and receive reasonable compensation for their services.To the extent that the corporation generates profits and elects to distribute those profits to the owners of the business, the percentage of the profits associated with the shares held in the 401k/PSP will flow back to the 401k/PSP brokerage account.

Then at closing your "payoff" figure will reflect the amount of the loan, plus your compensation for time and such. 

Take premature, massive action based on Instruction not Education.The benefits of Wholesaling:Zero to Very Little Financial Risk - Only a very small deposit ($100) and marketing dollars (much of this can be compensated for with Grit, Determination and Persistence) are at risk.Zero to Very Little Real Estate Knowledge Required - Wholesaling has almost nothing to do with real estate and everything to do with running a pawn shop.Fast - By far this is the fastest path to a massive cash position in the shortest amount of time that we have found.Scale - By following very simple rules (focus on a single exit strategy and a single marketing channel and being an owner/founder not a real estate expert) you can quickly create a business that is a servant to you rather than creating a job you serve.True Freedom - This is difficult to define and different for everyone but I can say this with certainty.

You may be compensated for admin support, you do not receive a commission.

I'm new to the site and had a question about GC compensation on a flip in Denver.