Seeking Advise | Muti family purchase with existing tenants

[Michael Fradette]

Good morning all, 

My partner and I are in the process of acquiring our first 3 family. The first unit is vacant, making it easy to renovate and bring rents up to FMR. The asset has been owned outright by the seller for 30+ years. Floors 2 and 3 have been occupied by the same tenants for many years (12 and 15 years).

They are currently tenants at will, and pay 50% of what they should for each of their units. Our goal is stabilize the first floor, and provide a ramp period for the two occupied units to increase rents. My question is two fold and I'm also open to any pointers: 

1. Do we get them to sign a lease for a short period of time (4 months for example) and explain after that time rent is going up 50%? 

2. Do we keep tenant at will and simply explain that rent will go up in 4 months? 

Really appreciate the insight all. 

Mike

[Kurt Jones]

It’s your property not theirs. Plan your steps then execute on it. This is a business