Please Help! Buying a Multi-Family and Owner Occupying

5 Replies

I need some help.

I am looking to buy a small multi family. The property is a duplex but can be converted into a 4 plex with a little bit of work. The duplex is currently occupied by tenants on a month to month lease. This will be my first property and I want to fund the deal through an FHA loan where I know I have to owner occupy which is my intentions. My question is with the tenants being month to month, can I just buy the property, not renew either leases and then renovate the property and convert it to a 4 plex while I'm living in it allowing me to qualify for an FHA loan? What are tenants rights in that type of situation in Utah?

To qualify for fha, you just need to be able to occupy the property within 60 days of closing. If both tenants are month to month, just close on the property, give them 30 days notice the same day you close, and then move in when they are gone. Shouldn’t be too bad.

However, converting the Duplex to a four plex is a much bigger deal, I would seek out some more specific advice to your location before pulling the trigger.

Collin, I'd recommend you speak with a loan officer to make sure your plan will qualify for FHA.

Make sure you have the okay from the city because that's a big deal to turn a duplex into a fourplex. 

As others have mentioned the city might stop you from executing a plan that sounds like a killer value add. 

You can try reading up on your cities zoning ordinances into how much square feet your lot needs to be in order to get a fourplex on it in that particular zone and there might be some other requirements like parking and things.

Either way your creativity sounds solid and even if you can only do a triplex might be a deal.

Good Luck