So here's where things stand today ...
I made an offer, in cash.
The other buyer has offered 72k. I offered 74k, hoping that the other buyer requires financing whereas I don't. We'll see what develops.
To speak to some of the points raised:
1. Yes, it will take a lot of cash but we still have extra for emergencies. We have family partnerships that distribute a few times a year so the next distribution we receive will go straight into the emergency fund, as will all income from the rentals. And if need be, my father in law has offered to loan us what we need in the interim. Truly, we are lucky to have so much financial support.
2. Yes, financing would allow us to purchase more properties; however, I also think owning one good property outright will end up benefiting us more in the future. Here's why: DH and I are self-employed so income can be variable and somewhat hard to prove. We plan on saving the money from the partnerships for another down payment. When we have enough for another purchase, we will definitely have to go to the bank for a loan. At that point, we won't have a large mortgage outstanding. Rather, we will have a free and clear source of income. That ought to help us with leverage in the future. Also, there really weren't a lot of good deals around. I ran the numbers on 20 different properties in the county and few were decent investments. So, even if I had money to make more offers, I'm not sure I'd find anything I'd want to buy!
Anyway, here's hoping the seller accepts our offer!