Purchasing 4 plex, getting new tenants, and renovation advice.

[Chris Shepard]

Hello everyone,

I've got a 4 plex that we are about to close on October 1st and the rents are way under market rents.  It's my goal to renovate each unit and get each one up to market rents as soon as possible.

Currently I am trying to strategize the best way to make this happen.

I am pretty worried the current tenants are just not going to pay on the turnover or say that the rent is less than what the owner has provided us in expired lease agreements.  They are all on month to month tenancies and have been for over a year.  Oregon law states that we have to give 60 days notice for no cause for tenancies over a year, but it also states that we can give 30 days notice if the property is being sold and we are moving into the unit.  I could imagine living there during the renovations and then moving out once we have each unit ready, but I am not interested in living in the building long term.

Anyone have experience with a turnover like this?  Any recommendations on a lawyer?

Thanks!

[Lucas Bennett]

Hey Chris,

I'm not sure how popular this opinion is on this site, but I think talking to your tenants and being honest is the best way to go. 

I bought a 7-plex in Portland earlier this year in a similar type of situation (rents way below market, MTM leases, needed lots of work, unsure about the tenants etc etc.)

We talked to each tenant individually, and found out that many were planning on moving out already in the upcoming months. We basically made a renovation schedule, based on when they were planning on moving, and everything went smoothly. 

When we did need to get into a unit to renovate it, and the tenant was not planning on moving, we talked with them and came to an agreement that worked for everybody. 

I think having a good lawyer on your side is definitely essential in doing real estate, but it is time consuming, messy, and can be expensive, so should be used as more of a last resort in these type of situations. On top of that, you are dealing with someone's home. 

I think talking with the tenants will save you time, money, and maybe most importantly, your peace of mind. 

Congrats on the 4-plex, that is very exciting. If you ever wanna meet up and talk shop, give me call. I promise I'm not always such a softie.