Not to sound rude, but if it was such an easy question you would have the answer by now.

You've got a LOT on your plate and only you can judge the family dynamic that you'll be working within but IMO you want someone you can dictate to and expect them to fully comply; if they don't they get replaced.  

So I would expect for the seller to tell you to take a hike, and you wont have to worry about your offer.Regardless of the repairs costs, unless you have reason to expect the appraisal came to the value in error (bad comps, errors in the specifics of the property, etc), than the $340k number was never going to happen.Sounds like the property has multiple problems, and it sounds like your not an expert at spotting these and have to rely on contractors, I would recommend you run from this property.  

Hey @Varinder Kumar -Sounds like exciting times for you!  

I am interested in getting into the commercial market years down the road, it sounds like such a daunting subject...

Earlier this year an inspector saved me a potential $20,000 headache by finding that the septic box had breached, and needed to be replaced or else the back yard would likely be a sewage pit in less than a year.

I've taken it as a place to make local connections and learn what I can, but I would never suggest it as a replacement for BP.

Ok, sounds like it might be better if I wait a year till I have $150k in cash - then I can operate at a higher price point by buying $100k+ houses.

Does this sound like a solid strategy and dodoes anyone have any other advice?

Yes contractors charge more in the Bay Area than other places in the country but $200k sounds reasonable.