All Forum Posts by: Nicole Walley

I have an opportunity to purchase a multi family property from my landlord. He has owned the property for 30 years. I went to him a few months ago just to get a feel for if he would be interested in selling to me. I told him I may have a potential investor to work with, and asked him what he is asking for the property. Upon doing more digging the home is listed as a duplex, however it has five units. Four in the main house (2 of them are 2 bdrm and 2 of them are one bdrm) and the garage was turned into a one bedroom. After reading some threads, I’m wondering where I go from here. I plugged in the numbers at what he is charging rent now, which is way under market and compared it to at market now. The home is located in an up and coming neighborhood right downtown. I have been surveying friends, acquaintences and co-workers what they would expect to pay in a rental in my location and they are right on the nose with what I would want to charge. It is a 2,000 difference in profit monthly assuming all units are occupied. My plan as of right now would be not to collect any profit for myself until the property is paid off. If I do this, I will have it paid off in five years with interest at 20%. I cannot help but want to jump at this deal. The home is older, and I plan on sprucing it up just enough for now, and then once I have my investor paid off start putting the profit into the home to build equity. All things considered, my biggest worry is that something could happen with the zoning. I definitely do not want to get myself into a situation where I have fines up the *** if the city says it’s a no no. I feel like this home is a cash cow but being that I am brand new, I guess I need advice at what to forsee going wrong. Thanks for reading!

@Frank Wolter thank you, this is a very helpful tip to someone like me who is a first time home buyer, looking for my first house hack.

@Ethan Schneider I completely get wanting to help someone you care about, however, would he even be able to afford the rent/utilities? Sounds like he is kind of financially strained the way you described the situation. My advice would definitely be to keep personal relationships and business relationships separate, and don’t rent to friends/family. Though it’s nice to be in a position where you have the ability to help people, it’s also more tempting to let things slide, or give people a break, this can cause strain on you financially, but also strain on personal relationships. Dont spread yourself thin trying to help. From personal experience helping close friends/family in this way they often expect a good deal or feel entitled to certain privilege. Don’t put yourself in that situation, be there as a friend, but not as a landlord, for both of your sakes. I just see that situation ending badly.

@Andre Sanchez thanks for sharing your story! I am just in the infancy of learning different strategies for real estate investing, pursuing the idea of House hacking. Looking at loan options and having a difficult time deciding what route to go. Any advice?

@Bob B. I found your response very helpful, thank you for your input!