Realtor · Mcallen, TX · Member since 2015 · 28 posts · 14 votes
Good day,
I am extremely interested in making an offer and purchasing an older income producing fourplex. Each unit has a private fenced (newly updated) patio and the units have a new roof. I am in the approval process for a loan that includes down payment assistance and a low interest rate if I live in the property. (I will undoubtedly qualify so not worried there.)
The problem: all of the units in the fourplex are rented. How would I go about removing one of the tenants to move in myself should everything go through the way I am hoping it will?
Any advice or next steps would be greatly appreciated!
Real Estate Agent · Fountain Valley, CA · Member since 2015 · 83 posts · 27 votes
10y
Oh well that's great if you have somebody who is month to month. You would just let them know that this is their last month staying there. If you need them out sooner than that, you could always try bribing them to move out sooner (don't pay them until they are gone).
In regards to financing, if you are attempting to get an owner occupied loan, you may want to talk to a lender to see if you would qualify given the situation.
You could also put a contingency in your offer and let the seller know that they have to remove one of the tenants in order for you to move forward due to your need for the owner occupied loan.
Real Estate Agent · Fountain Valley, CA · Member since 2015 · 83 posts · 27 votes
10y
Oh well that's great if you have somebody who is month to month. You would just let them know that this is their last month staying there. If you need them out sooner than that, you could always try bribing them to move out sooner (don't pay them until they are gone).
In regards to financing, if you are attempting to get an owner occupied loan, you may want to talk to a lender to see if you would qualify given the situation.
You could also put a contingency in your offer and let the seller know that they have to remove one of the tenants in order for you to move forward due to your need for the owner occupied loan.
Realtor · Mcallen, TX · Member since 2015 · 28 posts · 14 votes
10y
That would be the ideal situation, I just wanted to get clarification before moving forward with the loan and offer process. It really does sound like a great deal, all utilities are paid for by the tenants and the current rent is below market value so plenty of room for passive income. The best part will be the initial starting cash (minimal to none) if everything works out in my favor. I am hoping to get the units for $150,000 which is an excellent price. Small touch ups or renovations may be needed here and there but I know there is room for profit, especially if I move out after 1 year.
Thank you for your input!
I may steer clear of the bribe for now but hey, have to think outside the box sometimes right? I wouldn't have thought of that one!
Tenant-landlord laws vary by state but sometimes a tenant that's on a month to month lease is harder to evict, you must have "just cause". With a term lease, you can choose not to renew their lease but once it goes month to month, many states have stricter guidelines. I know if a family member or owner wants to occupy a home that can be considered "just cause" but I'm not sure how that applies to a multi-plex. You also would want to be cautious of discrimination among the tenants - how do you decide which one to target for eviction? None of this may apply to you but you should seek counsel before you move forward with evicting someone. Cash for keys is usually the best way to get a tenant to mutually terminate their lease and move out willingly. Just make sure you have them sign a mutual termination agreement!
Rental Property Investor · Durham, NC · Member since 2016 · 354 posts · 288 votes
10y
@David Trevino,
I'm currently trying to get into a fourplex to do exactly the same thing. I'm certainly not an expert, but I'm coming up to speed. The laws differ substantially by municipality. In California, owner occupancy evictions are legal, but there are some quirks depending on the city such as which unit you can kick people out of. I strongly suggest putting a contingency in your offer that you need to speak to an attorney with regards to eviction should the offer be accepted.