Below market rent: Is it better to buy with tenants in place or without tenants?
I am offering on a 5 unit multi-family in a fairly stable rental market. I have been going back and forth on the best strategy to close this deal, whether to ask the seller to remove all tenants, or to purchase as-is with the current below market leases.
The property needs minor cosmetic improvements in all units in order to get full market rent. All 5 units are occupied with month-to-month leases.
So...in deciding the best strategy, my big questions are:
1-Should I buy without any tenants? (if the seller is even willing to evict them)
2-Shoud I purchase with the tenants and then evict them all at once so that I can do the necessary renovations as quickly as possible and get all new full market paying renters I estimate I can renovate entire building within 8 weeks)
3- Should I renovate the apartments one-by-one (I estimate this would take me 6 months)
I would really like to hear some thoughts on this situation! Thank you! - Sean