House hacking a fully occupied property

[Jacob Willett]

I am in the process of finding a property for my first deal, which I plan to be a house-hack. However, many of the prospect properties I come across have long-term tenants in all the units. I am prepared to inherit tenants, provided they pass a screening process, but I need one unit available for myself to live in.

Should I just cross any fully occupied properties off the list and continue searching? How have/would you handled a similar situation?

[Brad Hammond]

Hi @Jacob Willett, first off I wouldn't count on being able to evict tenants if they don't pass your screening process.  Especially if there is a fixed-term lease, you will need to honor that lease. 

As far as moving in an occupied property, once you are under contract, you will need to have the owner/seller evict one of the tenants.  This will usually be the unit that is paying the least amount of rent or needs the most improvement.  This is usually done after inspections and the appraisal has come back.  You will want to release your earnest money at that time as a measure of good faith.  Make sure you are working with an investor-friendly agent on this one!!!