Usually the sellers attorney then does a " offer in compromise " saying for example if earnest money is 10k then the seller will agree to release now for 3k to cover their attorneys fees etc. up to this point.Usually a buyer gives in because they do not want months or even 6 months to 1 year tied up of their lives trying to get the money back.How much earnest money you put down also is key.

I know that my cut would get compromised when I have to negotiate with the seller, but what I'm really trying to figure out is how to negotiate a fair price so that everyone wins?

There was a compromise position between the SEC and folks representing the states that drove them to try to make smaller raises use the Tier I regime that would be governed by the “streamlined state review” or “coordinated” state review.

Would those be compromised?  

They will usually accept cash discounts (or country line dance lessons) if offered a compromise.

When knocking down walls etc. one cost that can be big is if the local city or county requires adding a fire suppression system to each unit with sprinklers etc.You have to remember older apartments many times are grandfathered in on old codes but when you go to do studs up they add all this crap that you didn't know about before driving up your rehab per unit.The main water line from the street to the building could be compromised and need replacing.

I'd recommend you do a thorough investigation on this guy and have him pay a deposit if he passes muster Also, inform Tenant #1 that he cannot hand over your property to another and in doing so, placed you both in a compromising situation.

Folks - we're investigating the post issue above, but do note that there are no security issues and no accounts have been compromised -- just a little bug that pops up once in a blue moon.

One thing that hasn't been brought up is the compromised ability to get into the property in case of emergency or abandonment.

If however, the wallboard was wet from a water leak, and if the structural integrity of the wallboard was compromised, opt to replace it (or have the seller do so).