Newport Beach, CA · Member since 2015 · 10 posts · 3 votes
Hypothetical question: If I purchased a fourplex, that currently had 100% occupancy rate, with an FHA loan which requires me to occupy one unit as my primary residence, then how do I go about removing the tenants from one of the units? Do I specify this in terms of the sale so the previous owner notifies the tenants that they'll need to move? What if their lease isn't up? I've heard in the podcasts that they usually have problems with tenants they inherit; if I wanted to remove all existing tenants from a purchased fourplex, do I have the previous owner notify/remove tenants as terms of the sale? How does this work?
That is definitely an interesting question and I am curious about what the conclusion is going to be. Not to change the topic of the thread, but if you have trouble getting financed, then look into the Home Ready mortgage program. You can use the rent from the existing tenants as verified income which should help with financing.
That is definitely an interesting question and I am curious about what the conclusion is going to be. Not to change the topic of the thread, but if you have trouble getting financed, then look into the Home Ready mortgage program. You can use the rent from the existing tenants as verified income which should help with financing.
@Ryan White, in your hypothetical, only ONE of the Apartments would need to be vacant (by closing? Hmm). Also, for a 4-Plex, the rent from the other three apartments, multiplied by 75%, MUST completely cover your mortgage payments! [Not official FHA advice, but please check]...
@Ryan White I was told by mortgage folks that 75% of the remaining tenant rent would be added to your qualifying income. I would definitely hesitate removing all the tenants, especially prior to closing. But getting rid of a tenant should be easier if they are on a month-to-month lease.
@Jamal Okon and @Brent Coombs thanks for your inputs. I'm aware of the requirements for FHA, including 75% of the rent of units occupied by parties other than myself. I'm more interested in the process of removing a tenant from one of the units so that I can occupy it. As a side question, I was curious if this process would be the same for vacating the entire building.