I will be going to college in a different city at the end of August, and instead of living on campus (I have already had the experience at another school) I would like to purchase a multi-family property. My question is, to get an owner-occupied loan with a better rate, what is the time limit during which I must move in? I see a couple of properties now that I'm interested in, but wouldn't move until August.
Also, if the property is fully rented, will I have to wait until their current lease is up to occupy a unit myself? Or can I give them enough notice for them to leave before the contract is up?
The time limit is pretty short. I'm not sure the exact number, but its on the order of a month or two.
When you buy a leased property you must honor the leases. You cannot just give notice and kick a tenant out if their lease is still in effect. This can be a problem when buying an occupied property with a OO loan. You need to be sure one of the leases ends soon enough for you to move in. Or, negotiation a "cash for keys" deal to get a tenant to leave early.
Jon Holdman, Flying Phoenix LLC
That's what I figured. Thank you!
Hayley, Jon is right about having to honor the leases. Your Realtor should be able to find out what kind of leases the current tenants have. It could end up being a non issue if there lease is up prior to you needing to move in. I have also been told that like Jon said offer them some money to move. Thats really a smart move going that route while still in college! Good luck!
Yes, I'm hoping it won't be an issue and that things will work out the way I need them to for my first deal. Thanks for the input!
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