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Updated over 8 years ago,
Househacking in fully occupies multifamily
I have zero experience in real estate and landlording, but I have been educating myself for a while. I wish to be a real estate investor with a focus on buying and holding in the future. Some of my conceptions could be completely off base because I don't know how things work in the real world yet. I would like to househack because I do not have large amounts of capital for a downpayment yet, and it would allow me to get an FHA loan.
Does anyone have experience or advice in the prospect of buying and moving into a multifamily property that is already occupied? With a special emphasis on being safe, because I am considering living in areas of town that are a little sketchier than average.
I'm assuming you would speak with the current owner or property management about when the leases are up. Is it possible to ask the current owner to ask the tenants about their intentions once the lease is up? Is it unethical or confrontational to not renew someone's lease if all of the occupants want to stay?
To avoid any potential backlash, could it be a good idea to "buy them off" by helping to pay for moving costs or another incentive? Or perhaps raise the rents on each unit and hope someone moves out voluntarily?
I would prefer them to not know why their lease was not being renewed to avoid a retaliation in the future because they would know where I lived. Would it be smart to put the property under a third party property management company to handle the discussion, at least for the transition period? This would possibly mask that the new tenant coming into their place had something to do with them having to move. This wouldn't be fullproof though because if they have a relationship with the other tenants that information would likely make its way to the ex-tenant.
Is this doable at all or is it only a recipe for disaster? Am I being overly paranoid/cautious or could this be a real issue?