Remember, the owner reached out to you and would be happy with the price you listed, he wouldn't be doing this if he thought he would get significantly more. 

Ideally, you should consult with both parties.

I know that the method I mentioned is riskier and not in any way ideal, so hopefully, all this due diligence will pay off and the next deal won't have to be like this. 

He talked about splitting lots and build on them a good deal if I remember correctly.

. ;-)One I remember was a drug house.

I do remember my first post a couple years ago, time flies!

I can't remember exactly how much, but I didn't want to pay for that back thenand @Mark Byrge hmmm they charge me $49/month, and that's after I negotiated down from originally $59/month... sounds like it's time for me to renegotiate that rate now... lol

Ideally you bring a trusted GC with you to offer his professional opinion on the matter.

Matt - thanks for the post I would recommend getting an owner occupied purchase loan for the new property you plan to buy ...this will allow you to get best rates available I would also recommend doing a  " cash out " refinance on the  free and clear rental  in order to obtain  a larger amount of  cash / working capital  for your  projected  plans  ......ideally a heloc  program would be best to set up but most lenders / banks wont  allow a heloc on a rental  property so you would likely need to  use a straight 30 yr fixed loan ..adjust the loan amt  so that the  cash flow you end up with is acceptable for you

He said he would mail them but if he did, I don't remember seeing them and can't find anything.