Negotiating the sale of my home

Here's my situation in a nutshell: Almost 4 years ago I purchased a home that was foreclosed on for $7k, I took out a personal loan for 10k so I could have some money to get started on repairs. I was hoping to be making/saving more money and putting that into the house and within 1-2 years resell it for a profit. That barely happened.

Two story home, 3-4 bedrooms, corner lot, .2 acres, 2 car detached garaged, good neighborhood in a small Iowa town, if the home was totally fixed up it could sell for 85 or so K.

I've put about 7k into it and I want to be done with this money pit. New roof, some new plumbing, some new electrical (still has a significant amount of knob and tube) newly installed 90+ furnace, new electric water heater, new downstairs windows. Asking 25k for it and have given about 5 tours over the weekend, mostly to contractors and I feel the asking price is about right.

No buyers yet but one guy who fixes up homes for rentals for a side job, who would pay cash, said he would be willing to spend more on a house that required less work, what scared him away was the plaster and lathing that would need to be removed. Not the drywall and electrical just the grunt work of removing plaster and lathing.

If no one offers within the next week or two I would like to make an offer to him that I'll remove all the plaster and lathing he wants (realistically 3-4 good sized rooms, and hopefully not the whole house but I'll assume he wants the whole house) for $35k

My question is twofold, is that a good negotiation?(grunt work doesn't scare me but I want paid for my labor)and is there anyway that if after tearing my house up he would be obligated to pay, like Is there a contract I could have him sign…?

For sale by owner.

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