Inherited tenants: Keep the 20-30 yr tenant hoarders?

[Keoki Kimzin]

BPers!

I'm closing on a 4 plex in a C neighborhood.  Two of the tenants have fairly maintained their units but the other two have trashed theirs (hoarders).  Both of these tenants have been in the units for 20-30 years and don't pay late and never ask for maintenance.

Goal: Exterior Remodel, increase rents 15% ,Cash out refi (BRRR) in 1-2 years

Option 1: Not renew leases and give 30 day notice upon closing.  Rehab and re-rent both units.

Option 2: All new year leases.  Rehab only exterior and save cash for rehab if/when they move out.

I really do appreciate your input!

Best,

Keoki

[Steven D.]

A tenant that has paid on time for 20-30 years and has not asked for maintenance is hard to come by. Obviously you don't want damage done to the property but maybe I am naive in asking "What damage are they going to do now that they haven't already done?" 

I would run the numbers on cost of rehab and the time it takes to recoup those costs in rent versus what you are receiving status quo. Additionally, a conversation always goes a long way. They maybe open to a small rent increase in exchange for coming in and doing some small or preventative maintenance. Best of luck