First Multi-family purchase

[Neil Patel]

Hello, I am currently in the process of closing on a 3 family home in Elizabeth NJ. I am financing the home using an FHA owner occupied mortgage. Currently 2 of the units are vacant and the 3 unit is occupied by a tenant who has been living in the unit for 27 years. She currently pays 875 a month which is way below market value and is on a month to month lease. Im not sure if she will be able to afford fair market value and will most likely have to let her know to vacate the property within 2 months. Will the process to evict here be very difficult? Since I am a first time owner-occupied buyer and the tenant is living on a month to month lease.

[Brandon L.]

Is it possible for you to break the increase up over time, so that the impact is not felt as hard. A 27 year history of on time rent payments carries more weight compared to  $3900 over a 12 month period. 

How much will it cost you to get her evicted, turn the apartment over, and find the next tenant? What if the next tenant has to be evicted as well? 

In my opinion a 27 year tenant is gold.