I know this is a long read, thank you to anyone who makes it to the end!

Hi all! My wife and I are looking to buy our first property and plan to house hack a small multifamily. I researched our area and sent letters to off-market owners who fit our criteria.

I ended up connecting with an owner who has two attached triplexes. She initially wanted to sell both together, which I couldn’t do since I need an owner-occupied conventional loan. However, I was able to get her to consider selling me one triplex now and potentially the second one after a year. She’s 73, her husband passed away several years ago, and she’s looking to start liquidating some of her properties.

Now for the details:

There is an HOA that covers landscaping, trash, and roof replacements. The roofs all appeared to be in good condition across the property. The HOA also covers insurance, including windstorm insurance (which is required in our area), so I would not need a separate policy. The current fee is $145 per unit, and both the owner and another nearby owner confirmed it hasn't increased since around 2018. I've always been cautious about HOAs, but this one seems relatively stable and owner-friendly. I'm currently waiting on the official HOA documents from her realtor.

All three units are fully rented, with some tenants having been there for 10–15 years. Their leases will transition to month-to-month at the end of this month. The property manager intentionally kept rents well below market to minimize turnover, so current rents are significantly under market for the area.

I asked the owner if she would be open to delivering the property fully  vacant at closing (so we can move in, begin renovations, and screen our own tenants), but she prefers not to, as she doesn’t want to be the one displacing tenants. She did mention that I would have the right to provide 30-day notice after closing. That said, I’m not comfortable relying on that alone, I plan to include a clause in the contract requiring at least one unit to be vacant at closing so we can meet owner-occupancy requirements. We’re scheduled to tour the property next week.

Here’s where I’d appreciate some advice:

We are currently renting an apartment (ironically right across the street from the property), and our lease runs through October. We’re receiving a $230/month concession, but if we break the lease early, we would have to repay those concessions plus the remaining rent of the lease, so it doesn’t seem financially beneficial to break it.

If we move forward with this deal and inherit the existing tenants in the other two units, what’s the best strategy for getting rents to market?

Here are a few options I’ve considered:

1. Hold rents as-is until our lease ends (October), then reposition

Pros: Helps offset the mortgage, gives us time to renovate our unit, and avoids immediate disruption

Cons: Leaves ~$300–400/month per unit on the table and we didn’t screen the tenants ourselves

2. Gradually increase rents

Pros: Improves cash flow sooner

Cons: Higher likelihood of turnover, and again, tenants weren’t screened by us

3. Vacate units myself and fully reposition immediately

Pros: Full control, faster path to market rents, easier renovation, can screen tenants 

Cons: Carrying full mortgage + renovation costs + current lease obligations, I'm the "bad guy", holding costs

If you made it this far, you’re the GOAT 🙏

Any feedback, constructive criticism, or strategies would be greatly appreciated!