I'm installing my 1/2" engineered product, and I'm confused as what to do when I get to my first stair riser. I guess ideally the floor would have been installed first and then the riser after, but we're past that.

What do I do here? Can I just butt it up tight and leave a nice expaqnsion gap on the opposite end, or do I have to leave a gap and use a molding of some sort? What type of molding would be used here?

Your choices are to either use 1/4 round molding, or undercut the whole riser and the skirt boards.

What tool would I use to undercut the riser precisley and neatly 1/2"? How would I sneak the boards under that tight 1/2" gap as I'm laying them?

I think undercutting the riser is the ONLY way to do this. Otherwise, the bottom riser will look odd with a trim piece running across it and none of the other risers having it.
If you can get a hold of one, use a FEIN Multi-master or Supercut.
A Japanese tooth blade will give you the cleanest cut. There are several "knock-offs" of this tool now available on the market for much less, and you will find many uses for it as time goes by.

I can't find any local tool rental place that can rent out one of these. I'd hate to spend that kind of money for one little job.

Would a jamb saw work? Any other opinions?

A jamb saw will work, assuming we are both talking about the same tool. If push came to shove and you had lots of time, this could even be done with hand tools. Anyone remember them?

Generally, this is true. But consider this. Suppose the floor has tall base installed and the homeowner has baseshoe installed as well ( which I think looks fine ). Having the baseshoe continue around the skirt bottoms and across the riser would be an acceptable alternative. Not as clean looking as no shoe, but acceptable. Also, the flooring could be butted tight in this location. Remember, it is engineered and more stable than a solid. Do not we recommend installing flooring tight to other vertical objects, such as baluster plates, newel posts, stair nosings, risers, etc ? Yes, ideally, the poster should undercut the riser. However, it sounds as if the odds of him doing it successfully are lessening, since he lacks the proper tools.

Ya Gary, only prob I have with fitting to that bottom riser is that it inevitably leads to a squeak where the hardwood rubs up against the riser. Of course whenever that happened to me, I just told the lady of the house it was a built-in alarm system so her husband couldn't sneak if from the bar late at night. Naturally I never got away with it though, so always had to fix the squeak.
I like the concept of carrying the same trim as used against the baseboards, but only as an reluctant alternative to undercutting.

I've had those squeaks before as well. But in this case, there's no subfloor deflection to cause squeaking because the substrate is concrete.

engineered floors still expand and contract and without knowing the size and layout of the entire job I still say either undercut or use 1/4 round.
you can get the dremel knockoff or craftsman now makes one also if you don't want to spend the money on the fein. And you will use it again so it won't be a waste of money.

Thanks guys.... Much appreciated. What would be a cheaper priced unit I could get to complete my job? Is it a dremel or rotory type of tool? Any links or suggestions?

I'm in agreement with Gary. I never thought twice about butting in this scenario.

The multi-function at harbor freight seems to be cheapest.

Really looking for something I can go out and rent tonight or buy if the price is right. Trying to wrap up this job.

Would a jamb saw not work for what I'm trying to do?

I've never seen jamb saws or multi-function tools for rent. You either buy or borrow. If you must have it done right away, then try calling some pro installers and ask them if and how much to come by and undercut that for you. Sure, some will turn you down. But if you keep trying, you're sure to find someone. All this said, if it were me, I'd just butt the flooring up tight and cross my fingers. I've done it before, even with solids. I have yet to have a call back due to that. I know it's not "by the book" and we here are all about doing it correctly. But it seems you're in a pickle, unless you can get a hold of the proper tool to undercut the riser. BTW, the Harbor Freight Multi-Function tool costs $40.00 usually and you'll most likely need a few extra blades.