Tenant remaining in home after foreclosure

[Barry Cooley]

Good afternoon. I need the advice of the more experienced people on here.

Four and a half months ago, I closed on a foreclosure. There was a man, his wife, and five children living in the home. The home had belonged to the man's aunt, and they were supposedly paying $500/month rent to her. After closing, I went to talk to the man to see what we could work out. He said they were planning on moving out in February, after he gets a tax refund check. So, I wrote him a contract to expire the last day of February. I let them stay for $400 per month, which is about half or less of market rent, if the house was updated. They made on time payments each month. I wrote the contract so that if they stayed past the last day of February, the rent would go up to aproximate market, which is $900. It is now the 4th day of March, and I have received no rent payment for this month. I talked to him yesterday, and he said he should have the money by Friday or Saturday, and asked if they could stay until his kids are out of school at the end of May. I honestly don't see how this family will be able to pay $900 per month. But considering the situation that they were in, I have tried to help them out the best that I could. Since the house was bought with cash, the only money that I'm actually out of each month is Insurance, about $84. My biggest issue is that I need to get in the house to do the rehab, so I can do a cash-out refinance. How would you guys handle the situation?