MORAL DILEMMA - EVICTING SENIOR CITIZENS

[Jimmy Rivera]

a question of morality.  i need to rehab my 4 unit but i've inherited 2 long term tenants (senior citizens).  there rents are way below market and i'm not sure how to ask them to leave.  one guy is in his 90's and the other in his 70's.  they are both on fixed incomes and the increase in rent will definitely shock them.  the building is in need of repair and i'm in need of a refinance soon after rehab.  any thoughts?  

[David Wandel]

I don't have an answer for you but what I do when purchasing a property with existing tenants in place I underwrite the purchase at the current rents. If it doesn't make sense with the current tenants there I won't purchase the property.

I may give them a small rent increase of $15-50 dollars. I still have some inherited tenants many years later. Most were under market rents when I purchased and still are below market rents but it really doesn't matter since the original purchase price met my criteria when I purchased the property. I currently have 5 tenants who will probably be with me until the end assuming their health allows them to stay. I will trade reduced rent for 10-25 years without a turnover.