All Forum Posts by: Nicholas Bossert

My apologies, I did not specify. The HELOC opportunity would be on my father's primary residence. I am building up my education and knowledge so I can approach him with a thought out plan. Thank you!

Hello! I am in Western NY and I am a new investor. I currently have 1 duplex, and I am looking to grow my portfolio. I am beginning the education process on the HELOC to BRRRR strategy. If anyone has any real life tips, lessons, or DO's/DONT's, I would greatly appreciate the advice. Thank you for your time!

@Jaron Walling @Oz Radiano @Theresa Harris @Thomas Latuga @Timothy Smith

Thank you all for the sage advice. I appreciate your condolences, and I appreciate your insight into this thought of mine. Clearly, and unfortunately, I am someone who likes to "get their ducks in a row," and sometimes a bit prematurely... I guess it was this newfound investor's mindset triggering me forward...

I definitely have a few years to calculate my father's decision (and mine), and in the meantime I look forward to tackling the current task at hand. Thank you again! 

Just to update this thread:

I received an addendum request for the purchase contract from the seller with stipulation that the buyer (me) conditions that the property be vacant upon closing. I happily signed. Thank you all again for the advice.

My parent's home is a custom build built in 2003 in a desirable neighborhood with above-average schools in a suburb in Buffalo, NY. 4 bed, 2.5 bath and 2,522 square feet. Unfortunately, my mother passed away a few months ago, and my father is living in the house himself now. He has kicked-around the idea of selling this home - or at least entertaining the idea to us as a discussion next year, and has expressed that he does not just want to list it on the market. The house has clear sentimental value, and I know he wants to keep it in the family.

I am about to close on my fist house hack near where I work, but my plan was to live in the house for only a year anyway, and move back in with my father. 

He has about $120-130k in equity (I would say around $200k to build the house), and it is listed on MLS sites as being worth around $278k. My father is 60yo, and plans to retire (hopefully) at 62.

How should I go about this? I love this home - I have lived in it all my life (I just turned 25yo), and my parents have added things (back cement patio, shed, fence) over the years to it. I do not think I will have the money for a down payment/loan approval within the next 1-2 years ( I would need about $50k at least for a down payment if I bought it with a loan?), and I worry that this would "drain" my funds if I took it on. I was thinking about the rent-to-own process, but not sure how that would work either. I know my father would be very much interested in a steady monthly income when he retires. At the same time, I understand the value of this house on the market, as well as the built in equity that exists. 

I also thought about seeing if my father would agree to a HELOC on the house. I could take that equity and use it for a possible flip or expand my hopeful real estate aspires, and give him a cut of the monthly rent/profit.

Does anyone have advice on this type of situation? It would be greatly appreciated, thank you.

Matthew, thank you for all of the information. I do appreciate the gravity of this all, and I am trying to make things work rather than toss in the towel. You bring up a lot of important points here. Importantly, my realtor reminded me that the seller initially agreed to have the tenant out by closing - I have to confirm this in contract. If things work out, I will give the seller money towards this process (cash-for-keys, I give the cash but do not need to deal with the tenant). All in all, I know my hands are "tied," but at least I was able to meet her briefly and make an impression.

I appreciate your wise-words, and I would be very interested in meeting you further - and hopefully I have something that is useful to you! Let me know if I can contact you. Thank you for your time!

- Nic

Bjorn, Thank you! And thank you for the help/advice. I realize this 90-day stipulation is my responsibility, and thank you for confirming that for me. 

Thank you for also clarifying the Case-for-Keys. I now plan on drawing up a contract (with more research of course) that offers cash for keys contingent on her items being moved-out, sufficient move-out inspection, and that she is no longer a tenant at the property.

She will obviously need to find another residence, so my cash offer is reasonable at $750? That number seems to be the "average" of a 1 room unit in the area. I do not know what a typical cash-for-keys offer lands at. I just get nervous that she will reject the cash-for-keys offer.

Thank you again for the advice!

Steve, thank you for your advice. This is helpful - I believe the 90-month stipulation is my responsibility, so I agree that Option C is the best option for me. I am trying to not let the NYS LL laws discourage me! Thanks again.

In an ideal world, I know I should have made this contingent on the house being transferred to me vacant, but I believe I am "in too deep" for that option.

I also realize the buyer-beware in purchasing a property with existing tenants, especially those of a family friend. There was likely no screening process, and they may have granted her leniencies (late or skipped rent) that she may be used to.

I am (hopefully) closing on my first House Hack duplex (3 bedroom lower, 2 bedroom upper) in Buffalo in the next month. The house is owner-occupied on the lower unit, and upper is rented to a "family-friend" for the past "10 years." I had a chance to meet her and make a first impression during the inspection process. She seems friendly, and I certainly not only want to follow the law, but make this a reasonable process for her. My plan is to live in the upper unit and do cleaning and updating, while the lower unit needs very minimal work. Before anything, the house needs updated electrical, and I already had an electrician come out and quote me on the job. She pays $500 a month, and from my impression, would be willing to stay in the unit for 1 year. On the Rent Rider, she is month-to-month with lease expiring on Jan 31st 2021. Again, best case scenario in my mind is that she leaves when that lease is expired and I move right in to the upper unit.

Should I:

A) Make an agreement with her upon closing to keep her in the upper paying rent while I do minor updates on the lower and the electrical work, so she has ample time to find a new place to live (so contract month-to-month still?)

B) Draw up a contract giving her 2 months maximum to find a new place to live, do not charge rent for that time, with cash-for-keys?

C) Straight up cash for keys at an offer she cannot refuse? Over $500?

I have done some research on what a landlord can/cannot do in NYS: "He" must give 90 days notice for any tenant who has been renting for more than 2 years that he is raising rent by 5%, or not renewing lease. 

Does that apply to me even though I am the "new" landlord?

Again, I am not trying to "gut" this lady, but I am unsure of any written/unwritten laws for this situation. Any help is greatly appreciated. 

Nic