The fact that you’re the only currently interested party puts you in a position of negotiating strength but also should be a red flag for you….if it’s such a good deal, why?

You’re on the right track – when you get the P&L statements and other financials you can base your offer on those – structuring it such that, as an investor, it makes sense for you because you can make $ based on the the past couple years’ performance and the financing you can get.

Once that offer is acceptable to the owner, or negotiated, make sure you get the actual tax records filed before you go to closing. I wouldn’t be at all suprised if these are much less optimistic than the owner’s provided P&L – which puts you in an even stronger position – because your currently accepted offer must now be reduced accordingly – after all, it’s based on owner’s own records and it appears they were less than forthcoming with you – why shouldn’t you just walk away, what else are they hiding?

The more time they invest in romancing you the more they may be willing to work with you on an actual bargain price.

Source: www.biggerpockets.com