Renter investing in my purchase

[Ross Spindler]

Hey everyone,  

I have a unique situation that I'd like your input on. 

I have a tenant who got a few $100k as inheritance. She doesn't want to spend it all on a house and would prefer to keep renting from me for $1500 per month. Her biggest stresses are not knowing how to invest and not having a place to rent because it's very competitive in Florida.  

I have a couple duplexes, good income, and great credit... but not enough cash for my next multifamily down-payment.  

Would you take $100k from your tenant in exchange for 10 years of future rent? At $1500 a month... she'd basically be paying 5.5 years worth of rent but getting 10 years worth. (Almost doubling her money)

I'd lose out on the $1500 rent for 10 years, but likely make it up by putting that cash into another property that can flow close to $1500 monthly. 

also, I think our ages matter to better explain motivation in this situation.  I'm 33 and she's 60. 

Would you take this deal? What parts aren't I considering?

[Joe Villeneuve]

1 - No.  The other investment must make you $18k a year just to break even.  Why would you do this just to break even?

2 - I would never commit myself to a situation where my return (of which I don't see one here anyway) is based on "give away".

3 - You're committing yourself to 10 years of rent free, to someone that (by your own mention) is 60 years old.  What if at any time during that 10 year period something happens that forces her out of your rental (I can think of at least 5 things off the top of my head)?

4 - If she wants to invest, let her invest.  Make her your cash partner on the next deal.