Vacating tenants to renovate apartment building

[ALLAN Pohlman]

I have a 12 unit apartment building under contract. The building is located in downtown of a small Ohio town that is trying to revitalize the downtown area. Every unit in the building is in need of repairs, there is a cockroach problem, and the local police and EMS department makes frequent stops in the building due to current tenants drug use/overdoses. Sounds like a mess...right?!?

The good news is that the property is in a good location downtown and has decent cash flow at 75% occupancy. That leaves 4 units I can immediately start renovating to produce additional cashflow immediately. I have a general contractor ready to go as soon as we close.

The major underlying issue with the property are the current tenants living there. Many of them have drug addictions and 2 of them are hoarders (which is probably where the cockroaches are coming from). Needless to say, these are not the type of tenants I like to target. Furthermore, it does not help the city's downtown revitalization efforts. 

My main objective is to completely renovate the building, increase the rents, and move in quality tenants (which is not only good for me but also for the town). I will start with resolving the cockroach situation (obviously), and then rehab the first 4 units while the current tenants remain in place. After the first 4 units are done, I will then need to start removing the current tenants in the building so I can start renovating those units.  

Here's my question: what are some effective strategies to vacate the current tenants? I would like to avoid the eviction process if at all possible. I know that's a long shot, but worth a try. It is also important to note that all tenants do not have signed leases (which qualifies them as month to month).

Here is my initial plan to "encourage" the current tenants vacate the property:

- Give each tenant a 60 day notice to vacate the property. I will present them a contract stating that they agree to vacate the property in sixty days. If they sign the contract, I will give them 1 month of rent for free while they are looking for a new place to live. My hopes are that the 1 month of rent for free will entice them to not go through with the eviction process. 

Is this a good idea or bad? I'd love to hear your thoughts and what you would do differently, given this situation.