Contract for Deed, Adjacent Rental Properties... Thoughts?

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Fellow Landlords and Investors, I have an inquiry on your thoughts and experiences. Perhaps you might be willing to lend me your advice from past experiences?

Here is a short story / background: I own an owner-occupied Duplex Rental Property. One day I was taking the garbage out and so was my neighbor, and I struck a conversation. "Hey, did you guys get some new furniture? I saw some couches being moved in a little while ago..." "No! Actually the landlord is renovating and we're moving out!" From this I realized that my neighbors were NOT the owners of the property next to me, and so I asked for the Landlord's number from the neighbor. Once I got the number, I called and left a message asking about his property, renovations, tenants, and whether or not he'd be selling.

It turns out that the renovations are to get the property ready to sell! This is good news for me - I want more properties, especially ones close to mine, where I live, my first investment property..... I have done what I can in the last couple of months to be as friendly helpful and outgoing to the landlord as possible, such as to get on to his good side.

Now, when he goes to sell the property, I would very much like to acquire it and have adjacent neighboring duplex rental properties. However, I am broke and can not afford another house right now. Also, I am not sure if this is a good idea - Would I be buying too soon, only being a year into real estate investing, and still working on projects for renovations at the first house / my home? How soon is too soon? How can I tell? What if I figure a contract for deed for the property? What if I 'rent to own'?

There are things that I know I don't know, and there are even more things that I DON'T know I don't know - So I am here for help and I humbly request assistance and any information / advice on the topic of my situation, and what I might do about it. Do you guys have any experiences with the above-listed scenarios? What would you do it you were me? What WOULDN'T you do?

Your time is appreciated, and I thank you all in advance for the conversations to come!

So I wouldn't buy it unless the numbers meet your criteria even if the location is great.  If you can buy it at a price that meets your criteria then see if there is a way to manage the cash flow in the short term.  I'm in a similar situation on one of my purchases where I found another deal before I finished rehabbing the first deal.  For me it all came down to balancing the cash flow until the properties are stabalized and rented at market rent.  I was able to do that because I inherited tenants and even though the rent was low, the property at least broke even while I finished the first project.  Now I'm able to focus on the new property.

Do you have an option to move into the new property and rent out your current half of the duplex? Maybe that would allow you to use an FHA loan or other means on the new house and keep house hacking?

If the landlord is renovating in anticipation of a sale, he is looking for top dollar. If you are "broke" as you say and can't afford top dollar, he will just move onto another investor or better yet a retail buyer who is looking to live there. Talk to him and let him know you are interested but I wouldn't get my hopes up.