Advise Needed: Owner says one price then raises it

[Frank S.]

Any advice welcomed! I have shown interest in a gutted home in my neighborhood for about a year now. I plan to tear down the dilapidated property and build a new home to flip. The area is hot and has other new construction going on. I spoke with the owner, an older investor himself, for the 4th time asking if he would sell. He finally gives me a number he wants, 275K for the lot. I agree because other homes in the area that have been bought for new construction have sold for around 265-275K. I send him a contract for the exact amount he mentions. After a week, he calls and says he wants 10K more. 

Here are the numbers:

285K for lot

350K for the new construction

700 minimum sales price based on comps

65K estimated return before taxes in 9 months to one year

Should I give him the extra 10K he wants? Should I counter? I'm afraid of making him mad because that lot is one of the best lots in the neighborhood and very convenient to my current residence. He also owns the home next to it but he rents it out. He owns other homes in the area but this lot is his best for a new construction strategy. Any unconventional counter strategy you would recommend?

[Ted Kuhlmann]

Frank S. This guy is definitely playing some hardball. Only way to do something here is to be strong right back. Don’t give him what he wants again (285k)

Why not go back to him and say that you thought 275 was a done deal. Let him feel your frustration as you were under the impression that you were already giving him what he wanted. Then tell him to split the difference here and that 280 is your absolute top. He has to take that!

If you give in twice to his demands, there’s no stopping him to do something again or during contract.