Updated over 5 years ago on . Most recent reply
Buying An Occupied Multi-Family
Are there any drawbacks to buying an occupied multi-family? I came across a quad that has 3 units occupied and 1 unit vacant. I am looking to invest in an owner-occupied multi-family, so the vacant unit is perfect. However, are there any cons to purchasing a home that already has tenants. My initial plan was to buy a property, force appreciation with a rehab, then use the equity in the home to invest in another. But, with the property currently occupied I don't see how a rehab would be feasible. Though this interferes with my initial plan, I know there are other ways to go about investing. So aside from this, are there any other drawbacks?
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#2 Multi-Family and Apartment Investing Contributor
- Rental Property Investor
- St. Paul, MN
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#2 Multi-Family and Apartment Investing Contributor
- Rental Property Investor
- St. Paul, MN
Buying a property with existing tenants is not risky like others have said. If you get a rent roll, profit and loss, leases and monthly bank statements that shows the payment history of the tenants, there is no reason to believe they will all of a sudden become bad tenants.
Raising rent is possible as well if the my are under rented. Raise one tenant at a time when their lease expires. If they move out, then renovate the unit and ask for the new market rent. Then repeat.