BRRRR - Evicting Current Tenants it New Purchase???

[Freddy Hernandez]

Hello BP!

I’m in the process of closing on a 2 flat + living space in a C-/D part of Chicago that is on the outskirts of a very up and coming neighborhood.

- Was on the market for $120k 3 months ago

- Dropped to $100k 1.5 months ago

- I offered $88k 21 days ago

- Negotiated to $72k if we close by the 30th and take on the current tenants (only 1 unit has tenants/other unit is vacant)

The property needs roughly $45k in work which would bring the property’s value to around $150k and would cash flow very nicely whether I go the conventional tenant way or section 8.

Ideally I want to rehab, rent, and refinance in no more than 2 months, but the eviction/tenant situation might slow this down. The seller is in a pinch and wants to sell ASAP and has lowered the price because of this so I would be stuck evicting the current tenants.

I am using a HELOC to finance this deal, but the longer I go without financing, the more I'd have to pay out of pocket to repay the HELOC on top of likely missed rent for the occupied unit.

Has anybody had experience taking on existing tenants and evicting them? Looking for tips, good and bad stories, and anything in between so I can be better equipped to reply to my lawyers.

Thanks in advance!!