HELPPPPP!!! About to be kicked out of place by owner....should I buy it?
So two years ago I became a member here at biggerpockets because I was interested in becoming financially independent. The consensus here on the forums was that I shouldn't get into real estate if I wasn't going to become passionate about it. Passion is irrelevant at the moment because now I find myself in a situation.
The owner of the three family house in Brooklyn, NY that my family (and now me and my brother) have been renting from for over 25 years, has suddenly decided to sell and has given us 30 days to vacate the premises. Currently, I rent the first floor apartment, my brother rents the 2nd floor apt, and in the third floor is another tenant. Needless to say, I'm a bit upset. He's asking $700,000 for it. I am about 95% sure that building is not a legal 3 family but in fact a legal 2 family only. The owner converted it into a 3 family (first floor was originally a garage) to try to make more money. In my opinion, the property is really worth $500,000 as compared with similar properties in the area.
Known problems, some water damage on a couple ceilings, bed bug infestation in basement and 2nd floor apartment, back yard is a mess, and electrical wiring is old and designed to support 2 apartments not three so there are frequent breaker "tripping" events. Furthermore, the boiler is very old and breaks down often and is due for a replacement estimated at over $7000.
Knowing all of this, do you think it might be a shrewd move to make an offer on the property myself? I think the owner is a motivated seller but I think it's more of he's sick and tired of trying and failing to make a profit on the place. He definitely was charging for less rent than he should have on the units as well as paying a lot in heat, lights, and water. So would I be inheriting those same problems?
The dream situation would be if I could get him to sell it for me for $500,000 and have the two units pay for a mortgage, utilities, and taxes. That would mean raising the rents. Both my brother and 3rd floor tenants intend to move. Rents in the area for similar dwellings go for between $1600 -$1800. I have been renting the 1st floor for $1000. Over the years my father even knocked down a wall so we could gain access to the basement effectively doubling the sq footage of the first floor apartment. You can't beat the rent I'm paying in the area I'm in.
I'm not sure what to do here. I need some guidance.
Thanks all.