Removing On-Site Property Manager Following Acquisition

[Rich Jordan]

I'm currently under contract for a 18-unit multifamily in NC. The seller has an on-site property manager in place receiving free rent for one unit + $1000/mo salary + another unit as an office. I plan to use a 3rd party PM company and reclaim the on-site PM's unit and office as two units for lease. This change alone stands to gain me $150k+ in equity due to the increase in NOI.

My concern is that firing this PM may prove complicated due to his status as a tenant. The fair thing to do would be to first give him the opportunity to start paying rent and remain in place - and I will do that, as long as he meets my tenant criteria following a -$1000/mo blow to his income. If he refuses, this could quickly devolve into an eviction. Any recommendations on how to approach this? Anyone navigated a similar transition?