Work for Rent - is it legal?

[Ryan Bitgood]

Hello BP members!

I am a new real estate investor and just recently closed on my first deal. I bought a duplex off of an auction and I am doing a total rehab on one side while living in the other. 

I also own a window and door business and one of my employees (a very qualified all around handyman) is getting evicted out of his house this weekend. He is genuinely a good guy and phenomenal employee. His life has fallen apart without any of his own doing (wife is in the hospital, etc..) and so needs a place to live. 

Is it a good idea to let him live rent free in one side of my duplex in exchange for him to complete my rehab? My second question is that once the rehab is complete (should be about 2-3 months from now) how do I structure it so that he finds a new apartment to live in? Hoping that he saves up some money while he's living for "free" to move to a new place. I am adamant about not having a long-term lease agreement with an employee due to several obvious issues. One of them being that if I had to let him go for any reason whatsoever (business downturn or other reason), it would directly effect my ability to collect rent. 

Thanks for helping me out!

-Ryan B.

[David Espinosa]

In my state it is legal and if they don't do the work you can get them out faster than a normal tenant. I would personaly put him on a month to month lease with proven work done put towards the next months rent. Say he installs carpet and you say ok I would normally pay 100 or whatever, he would get 100 off of rent for the following month. I would write up a scope of work and put a dollar amount on each item and say you do this work you get this much off. Keeps him accountable and would be fair. No work means pay full amount. When scope of work is completed he pays full amount or gets the boot. Be careful with renting to people you know get everything in writing and treat it like he was just another tenant or contractor. Hope this helps.

David Espinosa