First Off-Market Multifamily Property

[Devin Janke]

I currently only have one rental and its a single family unit. I now am looking for multifamily property's and found one off market that I am very interested in. It is an 8 unit property with 4 - 2BR/1BA units and 4 - 1BR/1BR units. I am planning on putting contractors in these homes and I would like to preface this with I am not worried about vacancy at all. I prefer the property to be vacant so I can use my connection to place their contractors in the property. One unit is currently vacant which I toured today and the windows looked to be in rough shape but the thing I am most concerned about is in the bedroom there was mold in one corner growing on the drywall that started about 2 inches up the wall and ended about 6 inches up the wall. It wasn't a ton and then there was another corner of the wall in the closet that the mold started from the floor up the wall about 12 inches but only in the corner about two inches in width. The apartment has baseboard heating and I was told this could be from cold spots or the previous tenant not turning the heat on, (this tenant had to be evicted). So my first question is what is a general rule for calculating a total renovation cost of an 800 sqft apartment? And how do I determine the cause of the mold? I want to write an LOI up to the current owner but am concerned about these issues and I know he doesn't want to deal with it.

The next issue is the tenants. There are 7 other tenants all section 8 and all of them have been trouble for the current owner and lets just say after my initial visit I am not going to want any of these tenant living there. Four tenants are going to be evicted soon as they have started a grow operation in four of the units and the rest are behind in rent. How difficult is the eviction process and does it complicate things that the tenants are section 8? My initial thought is that I would like to have the current owner evict the people growing prior to my purchase but I also know part of me getting this as a good off market deal I should try and solve his problems, aka buy property at a discount and evict the tenants myself. There is a lot to think about and would appreciate any help!