First House hack- Inheriting tenants

[Stephanie DeBerry]

Hi everyone,

I'm closing on my first house hack on Monday, Nov 1. First time landlord.

The garage apartment has 2 tenants on a month to month lease- they want to stay. They're paying $650, market rent is $800-900, which I was OK with due to them keeping the apartment in great condition and appearing to be good tenants. The seller is friends with the tenants, so no background check was done and no security deposit was collected. I spoke with one of the tenants on the phone about those items- both tenants have now submitted their background checks after a phone conversation and are aware that I am requiring a $650 security deposit.

Tenant 1 will be moving out Nov 24. Has excellent credit and income.

Tenant 2 wants to stay. Makes $1500/mo (2.3x the rent) through self-employment. I spoke to Tenant 1 on the phone who had a story about Tenant 2 being newer to the country (long story about background, lack of education, lack of credit, etc.) Background check shows credit card existing for a year that is paid on time. Says SSN may not be valid and to verify identity.

I'm concerned that the tenant who is well-qualified is moving out, and the tenant who wants to stay is not qualified (the income concerns me, as well as Tenant 1 telling me on the phone that she's willing to help Tenant 2 which makes me think Tenant 2 really can't afford the place solo).

Tenant 1 also told me that while the garage apartment is separately metered for utilities, the seller kept those utilities in his own name and has tenants venmo him for the utility bills. Seller is sharing the main house internet with tenants and splitting the cost with them.

Do I decline the applications related to Tenant 2's income and give them 30 day notice to vacate, ask Tenant 1 to co-sign for Tenant 2 upon move out Nov. 24, or am I too worried? If I proceed, I feel like the utility situation is strange, but I'm open to advice.

Would like advice from those experienced with tenants, inherited or otherwise.

Thanks in advance!