Hey everyone, I am currently in the process of buying my first owner occupied duplex, which currently has tenants occupying both units. Per my realtor, both tenants were on month to month leases, therefore I could move into the unit that needs more TLC, 30 days after closing.
I am set to close this Friday, and I got a phone call from my realtor today, who told me she just heard from the current property manager that the tenants in the unit I planned on moving in have a lease unit March 2019, and the tenants in the unit I do not want to live in until January 2019.
Here's the kicker... my current lease ends at the end of July 2018 (next month), and I will be out of the country for the first 3 weeks of July. I'm kind of freaking out, since I don't have time to 1, look for a different deal, or 2 hope that tenant in the unit I want to move in will go without a fight.
The current property manager said the tenant has been a good tenant, and he thinks that he will leave without issue, but I'm not going to just hope that he's right, as court costs will be a lot, I will have no where to live, and the cash I'll have left over from this deal will be needed for repairs for this property to cashflow.
@Alex Varner - So one has a lease will January and the other till March?
I would tell you agent that you can't close now. An owner occupied loan requires you to move into the property within 60 days. The agent should have verified this and gotten copies of the leases well before this came up. This is way too far along to be screwing up like this.
If you can't move into the property it requires 25% down so tell them to do their job and fix this asap. If they need to buy out a tenant then that is what needs to be done to cover their mistake
That is correct, the unit I don't want to move in is January 1st, the unit I do want to move in is March 1st. I'm going the FHA route with 3.5% down, so if I don't move in within 60 days, then I have to put 25% down?
@Alex Varner - Yep. So tell your agent the deal is dead, they did all this work and won't get paid, unless they get a signed agreement from a tenant agreeing to vacate by 7/31/18 and your bank needs it by Wednesday