4-Unit Delivered 50% Vacant - Lender & Insurance Issues

[Steve DellaPelle]

Hi All,

I had my offer accepted on a 4-unit property that I am using FHA to owner occupy and rent out. I have already signed the P&S agreement and now I am basically waiting to get fully approved by my lender and insurance company.

My homeowners insurance representative told me the carrier would have an issue with the property being delivered 50% vacant (I am living in one unit and another tenant is staying as they hold a lease through January 2018).

Am I allowed to list this property on sites such as Craiglist, Zillow, Trulia, etc. even though I am not the owner yet? If I can get a lineup of potential renters this would make it a lot easier to obtain the insurance and also provide further positive information to my lender.

I am also planning to rehab these two units as soon as I close so providing pictures would be tough...

Any thoughts would be helpful!

- Steve

[Deanna McCormick]

Ask permission from current owners to do what your thinking, it happens all the time and any holding deposit is contingent upon your closing.. I wouldn't take more than a holding deposit because you can't sign a lease for property you don't own.. I'd get something in writing from current owner giving permission to access and advertise. 

[Andrew Johnson]

Steve DellaPelle I know when I buy my agent has put in a clause around "the right to market" vacant units and units where a tenant gives notice during escrow. No money is collected but you can take pictures and schedule showing the day escrow closes. I'm not sure that solves your challenge about a lender wanting >50% occupancy pre-close.

[Steve DellaPelle]

I am thinking the best route right now is to seek approval from the Seller/Seller's Agent to just simply create a listing for the 2 vacant units with a general description and provide a date for a future open house. I really just want to gauge interest and see if the listing gets any attention/responses.

As I am planning to reno after closing, pictures from the current listing now would not be a good idea.

Thank you for the responses so far!!