<prompt> Human: My husband and I rent a 2 bed1 bath that is on the second floor of a three family home. Recently the first floor tenants, also 2b1ba moved out and out landlords announced they are going to sell the home. We are thinking of buying the place with our life savings and becoming landlords for the first time. Heres the scenario:180k in savings Possible 100k investment from my parents Landlords want to sell for 625k as isHome has 2 x 2 bed1 bath apartments and third floor is 1 bed 1 bath.Annual taxes were 12k last year Possible rental income from 3 units is 4,300Property is in a two bedroom zoned area. House has only one utility meter we split utilities 40-40-20 no fire escapes and is listed as a single family on the records.My parents are getting close to retirement. They Will eventually sell their house and my dad sees this as a chance to have a home base in our town while they can travel or go to Florida for half the year. He thinks him and my mom can be investors with us and have the third floor as their unit when they are ready to sell their home. The immediate plan would be we stay in our unit 1550 rental monthly, do minor fixes to the first floor kitchen and bath need updates and rent for 1,850. Our third floor neighbor pays 925. Future plan would be to convert first and second floors back to original single house design and live on the first two floors with our daughter who is 7 months old. We live in an extremely popular area of NJ that is close to NYC. Homes are regularly sold for way above asking and usually multiple offers are involved. My landlord is willing to wait until Monday to let my parents and I decide if we want to buy the house. Here are the concerns -house is not legal two or three family property - how hard would it be to be approved once transferred ownership occurs? My dad is a former firefighter so there is no chance of us keeping the property as is now no fire escapes etc - landlord is telling me she is asking 625k but we dont believe the house is worth that much. She seems to think that this house will be part of a bidding war too, but multi family properties have a history of staying on the market for a long time. A similar Home right down the street sold for 500 this summer. It had a finished basement ours is completely unfinished but the second and third floors need to be redone. -right now I am just communicating directly with my landlord who is also a realtor. My dad has a realtor who were going to use if we agree to go forward with the property.Plan would be to invest 100k each. That would leave us with 80k cash for updates and an emergency fund. If we rent the first floor and keep the third floor tenant, our monthly cost after mortgage and taxes are paid would be 750. We would have to carry 1,850 in first floor lost rent until the place is updated and rented out. -is my landlord being overly optimistic about how popular her property is going to be? I dont know how much of a barrier it is that the property is not a current legal three family. Will that make it one that people dont jump at? My husband wants to offer 550k max, but I feel like the landlord is expecting a full price offer. Should we try to negotiate? Is this a good investment? I think yes, because we are in a very popular area that is only going to grow more. My husband says no because he fears we are buying at the top of the market and there is going to be another bubble. My fear is if we lose out on this property, we wont have another chance like it and will be stuck bidding along with everyone else. What would you do? Thanks for reading, this was long and I hope it was clear!  <response>: First time homeowners buying an illegal multifamily building that isnt even remotely up to code sounds like a horrible idea. Youre probably going to have to spend a fortune to legalize the building and get everything up to code. If you dont, youll open yourself up to tons of liability. Unless you have friends or family that will do the renovations for next to nothing Id pass. 