Palm Beach County-Want to Move into Tenant Occupied Duplex

[Benjamin Schenk]

I'm looking at a couple of small multi-family properties in the Palm Beach County area (Lake Worth Beach, West Palm Beach, Palm Beach Gardens, Jupiter)--mostly duplexes and triplexes--that my wife and I plan to house-hack. One particular duplex has a very solid return after all expenses and based on conservative market rents for the area. The only issue is I am using an FHA loan that requires me to live in the property for the first year (hence the house-hack strategy). The seller has informed me that both units are rented with leases ending in February and August of next year at well-below market rents.

My question is, in South Florida, how can I legally break a lease agreement of one of the tenants so that I can move in.  I would have 60 days after closing to do so but don't want to get into a mortgage fraud situation, obviously.  I've heard of cash for keys, helping cover moving expenses, helping find another rental for them, etc.  Any other investors in the area have any experience with this or any suggestions?  I would HATE to let this deal pass me by over this situation as it's easily the best deal/property I've found over the past 8-9 months.  I appreciate any advice anyone can give.

[Abel Curiel]

Hello @Benjamin Schenk,

In my experience, this can potentially bring issues for the prospective buyer if they are an FHA borrower.

Perhaps the best route would be to pay a slightly higher purchase price (i.e. tack on 1st month's rent for the tenant's new place + moving costs) and pass the responsibility onto the seller. The seller can then make the arrangements with the tenant since they have the existing relationship with them. The contract will state that the property is being delivered 50% vacant.

My experience is in NY so I am not sure how/if this can be done in FL... just my 2 cents.

Best of luck to you on this deal!

Abel