You could form an LLC and have the operating agreement that allows your boss to require you to purchase his membership interest (or allow you to purchase his) in a given time frame.

Simply gifting him half the property now wouldn’t immediately allow him to claim the exclusion without fulfilling this residency requirement, I don't believe.One thought would be to use a HELOC to pull just enough equity out of the current home and use it to buy a smaller home, or at least the down payment.

.- You should have required the tenant to sign a Hold Harmless Agreement, indemnifying you against any of their claims.

The biggest thing with 5+ units is everything is more expensive, and the inspection requirements (depending on the municipality) are often more rigorous.

In short, I can afford the additional $1100/mo cost of a second house, even until I rent it out.I have around $35K in HYSA and emergency funds that I could use for a down payment, but that's less than 20% which would be required for a conventional loan, assuming full purchase price.

Making money in real estate requires experience and starting with no or little money makes you study harder.As much as most of us probably wished for it, getting started with a lot of money in your pocket is a recipe for disaster: the temptation is to make the deal work by throwing money at it.If you want to go into real estate go with a syndicator with a good track record.

You can use this property to hedge any others that you add that may only cover themselves, or require supplement until they are paid off.HOWEVER, if you have decided that your goal is to use Real Estate as a stepping stone to build wealth by upgrading the property you hold each time (condo to house, house to 4-plex, 4-plex to 8 unit, etc) then I think you are right to sell now while you think the property is at the top of it's appreciation.It will be hard for anyone on BP to tell you what to do as we don't know your goal.You are right. 

Quote from @Jordan Kaylor: What is a “seasoning requirement”?  

If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee.

@John Jacobs I require my borrowers to have policies that cover replacement cost.