Appraisal came below Purchase Price - What Should I do?

[Basit Siddiqi]

Hello Everyone,

I hope this is the correct forum for me to submit this. My apologies if it is not.

I put in an offer in a row-home in Allentown, PA.
Seller's original asking price was $50,000 and we agreed to $47,000 with a closing date of 7/14/17.

The Home appraisal from the bank just came in and the home appraised for a measly $36,000...
The bank will only finance 80% of the 36,000. So I need to either ask the seller to decrease the selling price or bite the bullet and pay 20% of 36,000 and the difference of $47,000 and 36,000 plus closing costs.

Below is the Rental Cash Flow Analysis

Rent = $900
Property Management = -$90
RE Taxes/Trash = -$100
Water = -$50(I am inheriting tenant and lease says landlord pays)
Repair Reserve = -$45
Cap Ex Reserve = -$90
Vacancy Reserve = -$45
Interest = -$125
Insurance = -$40
Principal = -$150

Monthly Cash Income $165

More details on the property is that it is built in the early 1900's and is 900 SQ.

Question for you guys is what do you guys do when the appraisal goes below the contract price?
Do you try to negotiate for the appraised value? Do you wiggle from there or stick to the appraised value.

Thank you in advance to anyone who provides me feedback.

Basit