All Forum Posts by: Jonathan S.

I completely agree and thats what made me feel un-easy. It seems like he wants a piece of the pie when its fixed up and worth double and then some what he paid. The way I understand it is he needs money to retire and he wants to reduce his living expenses, but he's afraid of selling and not being able to come back to montclair it seems.

I think a clever counter offer would be to assume the mortgage to bring his housing expense to zero. Let him stay in a unit and then rehab and rent the other unit. Add a balloon clause or something so in 5-10 whatever years when he needs to actually retire, I can refi the property and get him and myself some cash. Essentially a sub-to.

Ultimately I just want to own the property since its next door to one I already own and is a phenomenal location. So i'm willing to take some hit in the short term to gain ownership and help him out but it needs to make sense and I need to protect myself.

Thanks Mark, its actually in Montclair (I'm realizing I havn't updated my location) Anyway, I do agree that any part of a deal is better than no deal, just trying to think of creative ways to work it so I wouldn't be left totally exposed.

I recently purchased a 2 family in a highly competitive area in NJ which i'm house hacking. I've been speaking with my neighbor who has lived there for years and slowly planting the seed to buy his property. His property is also a 2 family however it is not in as good of shape and he doesn't rent it out. He is considering the idea but floated this proposal to me last night.

He is looking for someone/ contractor to front the costs to rehab the property then move forward essentially as partners where the individual would retain 70% of the gross rental and the owner would take the other 30%. Owner would maintain and pay the existing mortgage/ taxes etc. Ideally he wants to keep the property to maintain his retirement nest egg since he understands the actual value fixed up and appreciation potential moving forward. His idea is also that he loves the town and knows if he sells he'll probably never be able to come back in.

Interested to hear some ideas on how to structure the deal to be beneficial for both sides or maybe counter in a different fashion.

Look in towns along the train line in North Jersey. I'm about to make the move into a house hack as well. For me the math is more about finding something of good value, in a desirable area. After rent from the other unit(s) I'm willing to pay up to what I would otherwise be paying in rent to cover the mortgage, as long as I can move out and the full rent covers costs. cash flow is less important to me at this time since I'm using FHA and will be holding long term. I know I can refinance down the road and cash flow which works for me. Also theres an immense amount of competition so be prepared.

NYC is a different animal and hard to compare to other regions. NYC itself is an extremely tenant friendly city where an eviction is a lengthy difficult process that can take upwards of 1-2 years. It will be interesting to see what comes on the back end of this but the fact is no one will be evicted anytime soon and I wouldn't be surprised if judgements rule in favor of tenants and essentially wipe the slate clean for them with no repercussions for missed payments. 

Mechanical Engineer here. I run a small consulting business designing HVAC, Plumbing and Fire protection for a variety of buildings. I work with developers and contractors on a daily basis. Been saving, learning and researching RE for years and finally I'm looking for my first multi-family to start house hacking and getting things going. I ultimately would like to get involved in development as I know a lot about it and it interests me. 

As far as engineers in REI I think its a pretty obvious transition. Most engineers are super calculated and able to assess things from a pure analytical standpoint and without emotion. Makes it easier for them to target and evaluate deals.

The seller has decided to terminate the contract after our last correspondence. I appreciate the help from everyone here and hope this thread helps another investor make an informed decision. I feel this has been a great learning experience as I continue to forge my path and build a portfolio.

Thank you everyone for your responses.This forum is awesome in getting feedback from both sides of the spectrum.

Update as of this morning. My attorney sent over a letter yesterday evening detailing the fact that the seller has been a bit misleading through the process and we are willing to compromise to an extent but we are standing our ground. I pushed the max lease to 18 mos. with my option to renew only. Price is a number I'm comfortable with. so ball is in their court now. I've heard through the grapevine he won't move off 2 years but nothing official yet. 

This has been a great learning process so far though. I must say we both mis-communicated at first and I should've been more clear that i have no intention of throwing anyone out but that I don't know them and need to protect myself first. If they're awesome tenants there's no issue in renewing but if not, then I don't need to be locked in for several years.

This is my first purchase so I do feel slightly over my head. My big issue is the lack of control I feel. I want to make sure i'm not just pushing the deal away off the bat and I'm willing to negotiate but it seems like hes demanding what he wants as if he is automatically entitled to it. 

If I view him as a standard tenant the tenant almost never gets to just dictate the terms of their own lease and the landlord just accepts it.