House hacking a fully occupied four plex

[David A Perez]

Hello,

I have a question about something that came to my mind and I was wondering how someone who is experienced would handle it.

Say you find a four plex that you are interested in and all the numbers work out. It is fully occupied with tenants in place.

You plan to house hack so you can get an FHA loan and only have to put down a small down payment.

Since you are house hacking, how do you decide who you want our from the four plex?

Would it even be possible to house hack if none of the tenants leases are almost up?

What would be your plan of action in order to acquire and house hack a fully occupied four plex?

[Ryan Murdock]

@David A Perez It can be easier to start with a vacant building as you will have a clean slate and can control the screening process and decide yourself who moves in. There can be a lot of unknowns with inherited tenants. With that said, sometimes you need them in place to have the deal make financial sense for you or you need the stated income for your loan etc. 

If you do keep tenants in place be sure to verify as much of their history as you can, primarily regarding rent payment. See if you can get your hands on proof of their payment history through bank statements - either the sellers or the tenants - to verify they are current on rent and not habitually behind. 

Also look at the condition and cleanliness of each unit too and decide if they are someone you'll be glad you have as a tenant.