Need some help with a deal

[Hemanth Grandhige]

I'm hoping for somebody more experienced than me to help me out with a deal. I found a duplex in my area listed for 139k recently. The agent happens to be a good friend and we put in an offer at 130K. This was the exact amount the seller has remaining on their loan. I ran the numbers on it and the ROI was in the 15% range... pretty good in my book.

I also know there was another buyer willing to pay full price for the property and was going to live in one unit himself.  However he didn't have the 20% down that the bank was requiring. 

We went through the inspection... needed some work but nothing crazy... but the house didn't appraise... they couldn't find any duplex comps in the area so they went 10 miles out to find a comp.  The appraisal came back at 85K.  

I've asked the questions to see if the seller's loan is assumable and what the interest rate is etc... 

Now I'm wondering if this is a "subject to" opportunity... to bring the other potential buyer back in.  

Any advice would be much appreciated!