I'm buying a fully rented duplex....

[Ian Hoover]

Hey guys and gals,

I am closing in the next two weeks on a 100% seller finance deal I picked up, duplex fully rented but it needs cosmetic work here in Pittsburgh.

Do I ride it out with the current renters and do the work when/if they move out (they both have been there 5+ years but neither really take care of their unit) or do I rehab the units while they are in there and hope they take better care of their units?

It will cash flow fine as is but I will be increasing the cash flow once they move out, the upstairs tenant is section 8 so I don't think there is a ton of room for them to pay more and the bottom floor tenant can't afford anymore but I don't want to kick her out because she has been there 10 years and pays on time.

I should be able to get $150-$200 more per month the next time around but I need to sink $5k-$10k per unit to get that.

I thought I would get some more insight on this.

[Linval T.]

@Ian Hoover

Congrats! My take is that you may want to wait until they move, then do your updates. Otherwise, you will have to revisit parts of the refreshment again when they exit.

Furthermore, you will not be getting the increases anticipated if the changes are made during their tenure.

This seems to be a situation where you are caught between managing from your head as opposed to your heart. I say that because you mention that one of them has been living there for years and the other a section 8 tenant, who will not be able to afford your next rent payment scale.

Think through your action plan and execute it accordingly to bolster your bottom line.

Good luck.