How to renovate a triplex having tenants?

[Luis L. González París]

I'm attempting to purchase a triplex. It has tenants in 2 units. How do I best approach the renovation process for the entire property having tenants in place without making them feel I'm kicking them out? I would love to know different strategies so I can expand my vision. Thank you guys!

[Robert Belz]

Hi @Luis L. González París,

Great question with a lot of options. 

-The easy answer is to start the rehab on the vacant unit and the exterior. This could give you the time required to wait for a current lease to expire.

-If you find yourself in a hurry, you might consider negotiating a lease buyout with your current tenant in order to have them vacate. 

-If you find yourself under contract, order an inspection that includes meth. If a unit comes back positive for meth, then the tenants will be required to vacate due to unsafe living conditions. Recognize that you or the seller will be responsible for decontaminating that unit. (I'm happy to talk more about that if you'd like. It is not as scary as it sounds.)

-I have heard of certain lease agreements containing a clause known as Sale of Property. This clause would allow the owner to terminate a lease with a current tenant. Typically this happens once the owner has entered a final earnest money agreement with a purchaser. I would ask for the current leases of the Triplex, see if that clause is present, and ask the seller if he/she would consider it.  

-Tell your tenants your plan... you plan on rehabing each unit to add value and increasing the rent. Are they interested in moving into your recently renovated unit?

Good luck on purchasing the Triplex!