Looking to buy a 7 unit multifamily in Rhode Island but the owner wants to stay in his unit for two years at a reduced (less than fair market) rate. I am not sure how much hardball I should play with this. The deal is good enough that I would'nt mind having him stay for maybe 1 year but 2 years seems like too much. He is 72 years old and says he needs that time to move him self out. Any advice would be helpful.
@An Duong it's really up to you whether it's a good enough deal for you to agree to that.
I will say, besides the two years of below-market rent, you should also factor the cost of an eviction into your thinking.
It may not end with an eviction, and if it doesn't then you'll have saved some money, but I would go into it with the assumption you'll have to do one since I think there's a non-negligible chance of that.
In a negotiation, sometimes it can be helpful to try to figure out the other person's motivations and find other ways to meet it.
For example, if he's worried about being able to afford market rent, then if it's $200 below market a month, and you don't want to tie the unit up for a second year, maybe you offer to pay $2400 more at closing and only have him there for one year.
If he really likes the area, maybe you find him an apartment in the area and offer to pay his security deposit, a moving company, and X months of rent to get him started. That gets him set up in a new place in the area, but gives you back control of the unit in your building.
Just price it in accordingly to your purchase price. Ultimately you're solving problems in real estate and if the difference of market rent to his rent is XYZ$, then decrease that from the purchase price. I would agree with above to budget for an eviction, usually $500 for legal fees not accounting for lost rent.