Friend Will Lose House - What to do if You Are Barry?

[David Weintraub]

My friend "Barry" lives in a 3 bed, 1.5 bath in a very nice town in New Jersey.  He rents for approx $3,000 a month, which is low for the town, but not for the property itself.  The two homes to his right, one is on the market and was recently renovated, and the one right next door is in the process.  House he lives in sold for $480k back in 2010; homes on the street sell for $1MM+ 

I happened to go by his place last week to discuss some business and immediately noticed all of these factors, and others like the near-rotting window panes made of wood and the roof that needed to be replaced last year.  The owner isn't going to repair anything.  Owner's sister used to live a few blocks away but moved to Cincy.  Owner lives in Ohio as well, so no one nearby to oversee the place.  

Barry has crap credit, and a lot of expenses.  Used to work in finance, but that was ages ago, and thinks he's going to hit it big again (he probably won't).  When he first rented it his credit was ok, but not it's shot.  He can't rent somewhere else without getting credit up.  He's month-to-month on the property.  

I told him, "Someone is going to make an offer on this place the owner can't refuse, and you're going to be out.  You need to be proactive, contact the owner, and offer to buy it."  

I figure he needs to live there a few more years as he has a kid in college, one that's 16 and a 10 year old.  But at least he needs to control the situation.  

But again, someone is going to offer to buy it, and flip it.  

If you're Barry, what's your move? 

[Aaron K.]

The move is probably to do nothing, most owners don't respond to yellow letters or people making offers that are sight unseen, they think they have a nice little cash cow investment.  Barry doesn't want to put that thought in their head, because from what you've said he can't buy it even if he wanted to and if he made an offer the owners would likely poke around for other offers and find a better one.  He should report issues with the property if they are a big deal and he may try to negotiate a longer term lease if he wants to stay long term.