Income properties w/deed restrictions

[Gerald Spina]

I have an opportunity to purchase several local properties that were formerly part of a city sponsored revitalization project. According to the realtor because the city was subsidizing the original construction there are restrictions on the deeds.

1. The property must be used for investment purposes.

2. You cannot evict the tenant to increase rents, move into the property or sell to a perspective homeowner.

3. There is no "rent control" on the properties, but you cannot raise the rent above the income level of the tenant. This was put in for the section 8 houses however most of those were sold off.

The realtor states that most of units rent for $700 a month plus water, "which is a stretch for the current tenants who pay $590/month plus water" but they were told rent would increase after the properties were sold. Also most of the tenants are long term tenants some have been there up to 13 years.

On the surface the numbers look good but some of the conversation with the realtor has raised some concerns and I'm not sure how / what to ask to clear these up.

Can I ask for copies of the lease agreements with the current tenants? How do I validate income to adjust the rents? Can I ask for a copy of the deed restrictions? If the tenant was told "rent will go up" can I increase the rent or is the deed restriction keeping the rent at the current numbers?

Like I said on the surface the deal looks like it could be a good income property. But it looks like it could also be a costly can of worms. If these aren't section 8 tenants and they are barely making ends meet. Is there a way I can see how often the tenants have been late?

Any advice you can offer is greatly appreciated.

Thanks