First Property Tenant Potential Issue

[Wesley Jensen]

Hey Everyone,

I am buying my first rental property soon (closing 1/30) and have a strange predicament. The property is an upstairs downstairs duplex with a tenant in the top unit. The top unit was rehabbed prior to the tenant moving in (end of 2015) and the move in checklist says "new" for everything. I am doing an FHA loan and will be house hacking for the first year. The downstairs unit was recently rehabbed and is vacant. The current tenant pays under market rent ($875/month) and my realtor has said he thinks the downstairs should produce $1100/month. During my inspection I asked if it was possible to finish the attic into a master suite, making the unit 3 bed 2 bath and hopefully producing $1200-$1300 a month when I move out in a year. So I plan to rent the bottom unit and finish the attic and do some other improvement while I live upstairs.

So there is a little background and here is my potential problems. When I saw the house for a second time I noticed a leak under the sink, bucket full of water, warped bottom of cabinet and flooring around the sink. We showed the sellers realtor and he called the owner and they fixed it right away. I had asked that I purchase the property vacant, because 1) I want to live upstairs 2) not only the leak and damage, but the tenant has a dog which goes directly against the lease 3) unit producing under market rent 4) I was worried about dealing with an eviction giving the tenant 30 days to vacate which would be the end of February (not ideal to move in February in Connecticut). The owners said no to having the property vacant (they said they did not want the deal to fall through and have no rental income). Apparently they discussed this with the tenant and own a property nearby that she will be moving into Feb 1. Now I close Jan 30, so they will have to give me her security deposit and I will handle moving out checks and all. I have asked if she reported the leaky sink, or any other maintenance issues, and they refuse to answer because she is moving into their other property and want to keep good relations. 

Is it worth me assuming she didn't tell the owner (when I found it and told the sellers realtor it was fixed promptly), and keeping whatever it costs to fix the damages from the security deposit? Or just eat the cost and being happy its (almost) vacant?

This is my first post and I am very grateful for any advice or input! Thanks!