My landlord is retiring and I want to make an offer

[Caleb Silvers]

I have been living in a small multifamily complex with 6 units. 1 quad and 1 duplex. It is a VERY old property and needs full rehab. I was considering getting the quad on a FHA 203k loan and getting an investor to help with the duplex. The property is in an Amazing location in a very fast developing area with a serious need for affordable rentals. I am paying $500 per month for a 2 bedroom. The next cheapest rental nearby is $975 for a studio. The current income from this property is $3000 with the potential to be $4500 and still be the cheapest by far nearby. Assuming it needs $125,000 in rehab and I could purchase the property for $150,000 it seems like a fool proof plan. Any thoughts or advise?

[Michael Kiley]

So you'd have 275k in to it and be generating 3000-4500 per month? Sounds like you'd be doing better than the 1% rule and could potentially have a small down payment. Also, you would no longer be a renter. You know how the property is run since you live there and it sounds like it's in an appreciating location. If your landlord is retiring, he probably doesn't need the cash right away so perhaps, he might be willing to finance part of it too. If not, you can get the best terms from a conventional lender since you would be living there.