The approach will be a manager-managed LLC with a general partner and 200 limited partners. 

Deal sourced through networking, partnership flip approach, rehab was financed through a HELOC.

  $80k sounds pretty high to me even to tear-down-rebuild, which is probably an excessive approach just to make parts align right.The dividing line between owner-occupiers and investors in buying and selling decisions is the investor approach is the numbers. 

With a 30y at 4% I can expect the following but still not very attractive.Actual - 18-12.3= 5.7 ----break-even at 12yWishful - 30-12.3 = 17.7 ---- Break-even at 3.8yWhat is the best way to approach a situation like this?

I’ve worked with my GC on several deals and he has approached me about wanting to work together.Essentially it would work something like this…1) My LLC purchases the property2) He will only charge me COST on the labor and materials (no profit or markups) which will save me around 30% on regular contract figure he gives me in my market which is very expensive3) He will also make 300k of his own liquidity available to inject into the deal (I will put some of my own cash in and get a HML loan for the rest).

Interesting scenario - generally these are situations where an appraiser would use the cost approach when estimating the value of the home or go wider in the parameters for finding comps.

Raising rents to market, doing those fixes in theory raises the value when using the income approach.

The down side to this approach would be that the portfolio then becomes all or nothing.

I do not know how the counter was damaged but trying to go down the path of expected life span is likely not your best approach.  

How should I approach the situation to get the owner interested to sell???