Evicting Tenants on 4 plex under contract

[Ross Y.]

Team!

The BP community got me started house hacking 5 years ago and now I’m up to 9 doors with this one! Thanks!!

I’m under contract on a 4 Plex in San Diego area. I was looking for some collective thought on my approach to get this property up to market rent. After walk through, I believe my best option is to give a 60 day notice upon closing. Once tenants are out, renovate, and re-rent. See factors below.

- Total rents are roughly 2500 per month under market.

- current rents will not cash flow. PITI capex 4800… rents total at 4500.

- each unit is over occupied; one 2 bedroom has 8 occupants with beds in living room etc. lots of poor tenant improvements… extension cords coming out of windows, sheets on windows, etc

-fairly nice area

- property was mismanaged and is quite sloppy. Lots of junk, too many cars parked there, etc

- the tenants are friends/family of each other

-estoppel agreement showed that none are US citizens. Language barrier is difficult.

-cosmetic renovation needed on each unit. One needs kitchen renovation

- I have reserves to cover costs.

-I’ve tried to raise rent to market on tenants in past RE purchases and it’s always been a PIA and they move anyway.

-will probably offer cash for keys (Ill have all their deposits through escrow)

- my 1031 clock was getting close and I needed to get into this property for the tax savings… the numbers work but it will take a little TLC to get it up to market.

-this is a long term income property for me.

- I self manage.