What are my options??

5 Replies

What's going on PB community!! I received a call from one of my direct mail campaign. The motived seller wants to sell a four family that is fully occupied. The seller doesn’t want to evict any tenants before the closing and the seller doesn’t want me mentioned about thing about evicting the tenants until after closing. I want to OO the property with a fha loan. My main questions is.. Will a mortgage company give me a fha loan, if I tell them I’ll evict a tenant after closing? What are my options besides hard money? Thanks for all the support!!
Originally posted by @Dawid Surowiec :
What's going on PB community!!

I received a call from one of my direct mail campaign. The motived seller wants to sell a four family that is fully occupied. The seller doesn't want to evict any tenants before the closing and the seller doesn't want me mentioned about thing about evicting the tenants until after closing. I want to OO the property with a fha loan. My main questions is.. Will a mortgage company give me a fha loan, if I tell them I'll evict a tenant after closing? What are my options besides hard money? Thanks for all the support!!

Not a lender so you should consult one. The FHA loan is an owner occupant loan. As long as you promise the lender that you will occupy the place in 60 days, and follow through with your promise, and continue occupying the property for 1 yr, you should be fine.

I have heard from some friends that in blue New Jersey, it takes forever to evict tenants. Do you think you can evict the tenant in 60 days? Not sure. I Virginia you can do it probably 2-3 times lol..  So talk with the lender about that aspect as well. 

@Dawid Surowiec alarm bells should be going off when I hear an owner doesn’t want tenants to know etc. they need to know as otherwise what if they come back and say they have 2 months deposits or leases executed etc or better yet they are not paying and your trying to evict them which could take forever. I would be very cautious on this one.

@Dawid Surowiec   - I would not go into immediate panic attack because of what the owner/seller told you. Lot of owners are scared of the tenants, just like tenants are scared of owners.. 

First of all you need to handle this in a professional manner. Ask for 7-10 day due diligence period in your contract. During that time ask the seller to provide everything that has been signed by the buyers. 

Go talk to the buyers and ask them, their experience...  Why do you want to evict them?  Are they not paying on time? Are they doing illegal activity at the place? Are they causing nuisance to the neighbors? Have they damaged the place? Why the word eviction?. That's a pretty harsh word for any tenant. You are literally putting someone on the streets and changing locks of the place they call home..Don't pull that gun out unless a) its deserved and b) you are ready to pull the trigger. 

If you don't want the tenants and they are M2M, in most states, you can give 30-60 day notice.  You need to understand what the rules of your state are, and act accordingly. 

@Dawid Surowiec I would look up the FHA requirements online which should tell you whether or not there needs to be a vacant unit before closing in order to qualify. Also I know many banks that use FHA lonas have their own criteria so that might be a huge factor as well.

Even though "blue New jersey" is a bit tougher to evict tenants you shouldnt have a problem once you give notice to tenants that you will be using the apartment as your primary residence. I believe you need to give 60 days notice though.

On a side note, are you thinking of doing a DM campaign in Passaic county? I know there are some good deals up here since taxes seem to be a bit lower.

Hope it works out.

@Dawid Surowiec , in NJ you have to give tenants 30 days written notice before starting the process to evict. Read this carefully

http://www.nj.gov/dca/divisions/codes/publications/pdf_lti/grnds_for_evicti_bulltin.pdf

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here