you can get an FHA loan but all the units are rented, what can/would you do?

[Mason V.]

This question comes from looking into the available multifamily properties in my area. The properties are available, yet all the units are rented.  What do you do if you want the properties? Do you throw people out? Can you throw people out (I cant imagine the Oregon government allowing this)? Do you resort to creative financing in order to keep all renters? How would you more experienced people proceed?

[Rob L.]

Hey @Mason Valenzuela , that happens all the time with FHA financing. Usually what happens is the tenants are there month to month so you just put it in the contract that they need to move out and that the property is to be transferred vacant. One of my partners actually just bought a 3 family that he was planning on living in and renting out the other 2 units. So it was written in the P&S that unit 1 was to be vacant and the other two units were month to month so he just signed them to leases once he closed and moved into the first unit.

It really depends on whether the tenants have a lease, if all the tenants are Month to month then its easier for you to decide how you want the property. One benefit of taking over a multi and living in one unit is if you get the rent for the occupied units at closing. So say you close on the 2nd of the month the previous landlord will give you a check for rent from day 2 to the end of the month. Its a nice little boost of cashflow for you at closing. Of course this has to be in the contract.