Would you guys do this deal?

[Matt M.]

Hey all, So I own an attached SF, it is a “half double” or “half duplex” as some call it. I bought it 3 years ago, stole it on a Hudson & Marshall auction. I have been interested in the other half since day one. Fixed up it is worth $90k+. The owner is an older gentleman, and I’ve spoken to him about it many times over the past 3 years. He had said hopefully by end of year he would sell it to me, around $38k which is the balance of a loan on it. It is livable but super dated, needs work, bathroom, kitchen, etc but roof, windows, siding, boiler, electric all updated in the last 5 years. He wants to sell, is just scraping by, but is having trouble finding a suitable apartment. Would it be a good investment for me to buy the house now, and rent to him at a discount, for say up to 2-3 years, but letting him go as soon as he is ready? Expenses would be about $350/mo for me, and rent to him for $7-750? I get $1080 for the other half, rehabbed. I would do no work now except for things that would need immediate attention, and throughout his stay. So I would make a few dollars while helping him out. Win-win?

[Jaysen Medhurst]

@Matt M., maybe?

How much do you think it will cost to update? If it's more than $30k, you'll end up leaving some money in the deal, which might not be terrible.

For me the real trouble is that you'll be losing up to $380/month for up to 3 years. That's almost $14k, so you need to work that into your numbers. 

Finally, what makes you think he'll be able to move out in 2-3 years. If he's retired/fixed-income and just scraping by now, there's no reason to think he'll be in a position to find another place then...or ever. Are you okay potentially losing $4500+/year in perpetuity?

Maybe there's a way to get him some senior assistance or Section 8 and bring the rent he would pay up to market?