Hi Nick,
You've tried to terminate twice.
Start there. You already know the answer. What you're looking for is permission, so let me give you some, plus four things nobody has raised yet.
The Section 8 money may not survive the repairs.
Two of your four units are voucher units, and that $4,600 is what's holding this together right now.
Housing quality inspections happen annually and after major work. A collapsed soffit with the attic open. Water damage. Failing roof. Exposed rebar on a walkway people use to reach their front door.
Those are failable items. A unit that fails and doesn't get cured in the window stops getting paid on.
So your only income is sitting on top of the same defects you're planning to fix, and the fixing is what triggers the look.
Your carry.
PITI runs $6,700 to $7,000. Collections are $4,600. You're $2,200 a month out of pocket before one repair, before insurance, before management.
Now put foundation leveling, a re-slope of a sewer line under the slab, a roof, and a structural deck rebuild on a calendar. Eight months? Twelve?
Twelve months at $2,200 is $26,000 in negative carry, on top of the rehab. And that math assumes your two occupied units stay occupied and paying while crews jackhammer the floors underneath them.
They won't.
Flood insurance is a gate.
A stream runs through the property and it's in a mapped flood zone. Your lender will require coverage, and on a four unit with documented water damage, get a bound quote before you spend another dollar on anything.
Some carriers will decline it. If nobody writes it at a number you can carry, this is over no matter what the engineer says. (That phone call is free and could end this whole thing by Tuesday.)
Check your hazard policy the same way. Underwriters ask about roof age and prior water claims, and they ask the seller's carrier too.
The seller is telling you something.
You tried to walk twice and they keep pulling you back. That's a seller who knows exactly what happens when this property hits the market again with a structural report attached to it.
You're the only buyer they have. All the leverage in this deal is yours, and you're experiencing it as pressure.
Now the friend part.
Every deal has problems. Every single one, not only the bad ones. I was around fifteen deals in before that clicked, and until then every problem felt like evidence I'd screwed up somewhere.
But foundation movement, a slab sewer belly, a failing structural deck, a roof, water damage, and a flood zone all at once isn't a punch list. That's the building telling you what it is.
And by your own numbers it barely cash flows after you fix all of it.
Your earnest money is real and losing it will sting. Set it against $26,000 of negative carry, an open-ended rehab, and a 95 percent loan on a $925,000 property with no equity underneath you.
Earnest money is the cheapest exit you'll ever be offered here.
If you keep going, two things. Have the structural engineer write you a scope of repairs rather than an opinion, so every contractor bids the same work and you get a real number instead of a range. And scope the sewer again with a written report, because the engineer won't address plumbing and that belly is under concrete somebody already broke once.
Then take the whole package back to the seller and reprice it. If they say no, you have your answer and you didn't have to be brave about it.
