Investor · Bridgeport ct · Member since 2017 · 28 posts · 8 votes
Hey everyone. So im looking into buying a multifamily and quite a few of them have tenants in place already. I wanna house hack so some/ all the tenants may have to go. Im using an fha and i have to live on the property
As a first time investor , do you suggest looking at vacant homes only?why or why not ?
Also, if you would like to keep some tenants but have one move out of a unit for you to occupy , how do you go about having a particular tenant move out ?
Because there are covid rules in place at this time, can you have a stipulation in place where the home is vacant prior to purchase ?
All your input is greatly appreciated. If there are any meetups in the CT area please let me know as well. Id love to connect with people.
If you want to live in it, only one set of tenants need to move; however, you said some of the units are empty...so move into one of those units. Stipulate in your offer that X unit (whichever one is vacant and you want to live in) is empty upon possession. This means they can't find a new tenant and put them in it or the sale falls through.
If all the units were full, you'd have to look at the leases and hope that one is coming up for renewal and ask for that unit to be delivered vacant. You are going to have to put down a larger deposit because no owner is going to kick out a paying tenant when there is a risk that the deal make fall through.
Leases are in place and they transfer with the sale of the home, so you need to honour those. That means no rent increases or changes to the terms until they are up for renewal.
For a single family home, buy one that is owner occupied or vacant. Then you know you don't have to deal with tenants that the previous owner screened.
i was in this very predicament a few months ago. I closed on an FHA duplex house-hack in March. Right when everyone started freaking out about corona. And here I was, Mr. big bad new owner, having to boot someone out so that I can fulfill my legal obligation to occupy the property. I brought up the news immediately after closing(rip the bandaid). I really did feel terrible about having to do it but I did my best to convey that it was beyond my control. There was definitely push-back even though I offered a condolance of free last month rent. they found a new place and retreated as fast as possible. luckily they really wanted their security deposit back so they withheld from distroying the place. it was tough. I almost broke down to offered them "cash for keys" but in the end it was a civil transaction.
so to go back to your questions, should you look for only unoccupied properties? I'd say No. Don't let that get in the way of a good deal. That may sound harsh but really you need a thick skin to be in the buisness of landlordering.
kick everyone out? ive heard many people talk about inherited tenants. It's usually a rocky road. And from personal experience, I'd much rather screen my own. But you never know. They could be incredible.
As an investor, you need to know your numbers, cold. Especially if you are looking to house hack.
Whether you hire out everything or are more involved, plan from the beginning to be able to step away from the business if you need to.
That requires careful analysis of the property BEFORE you buy, to determine if it meets your financial goals AFTER including all expenses.
If any turn key company sends you a cashflow analysis without at least TIMMUR: 1. Taxes, 2. Insurance, 3. Management, 4. Maintenance, 5. Utilities, 6. Repairs
Then run for the hills.
In Bridgeport, Connecticut and many North East regions we also include Snow Removal and Pest control.
Both vacant and occupied homes have their pros and cons so it really depends on what your criteria and what you are looking for at the end of the day.
Explore all markets but do your research, as to where net migration and jobs are heading.
I hope this helps and please feel free to reach out if you have any questions.