Google Punish for this and for how long

Arlight here it the story,

I bought a domain from a guy that was selling. I wanted this domain name because it has a couple great keywords in the address. We both sell the same type of thing but his site was terrible, so I removed his site completely and started to build my own which will be much better.

I have dropped from being number 5 in google for the search term I wanted to 10. I am hoping once google forgives me for changing the site around it will bring me back up, and truth to that

Did you 301 redirect all the old URLs to the new URLs or atleast to the homepage? You want to keep the link value of the old domain name and really should of done this. Hopefully, you did and your just seeing the temporary drop from 301 redirecting.

i didn't think they would do that.. odd

I'm assuming you have not changed the site you originally owned and then bought this new one and changed it and as a result it's rankings have dropped to #10.

In this case I would be inclined to analyze and compare the site you bought and the one you replaced it with as this would certainly point out some obvious difference from an SEO perspective.

If you have trashed the original site you purchased and can not get a copy try using the Way Back Machine (Internet Archiver).

Regards,
Mark.