I've got my first deal on the radar. It's a duplex with both sides currently rented out. One side has a leased signed until 12/31/11. The other side has the tenant on a month-to-month lease.
This being my first deal, I really want to buy the property and occupy one side and rent the other. I would like to do this with the standard FHA financing. Is it ok to purchase the property under the terms that I close when the month-to-month tenant leaves? How hard do you think it would be to convince the seller to not renew the MTM lease so I can occupy one side and get FHA financing?
Is this ethical and legal?
What are your thoughts?
MTM lease requires 30-day WRITTEN notice. You gonna have to do it yourself once closed. It is both ethical and legal.
I can't imagine that the current owner would be willing to kick out a good MTM tenant to make his property eligible for an "owner occupant" buyer and 3.5% down FHA financing. He has no assurance that you could/would actually close on the transaction. His property is probably worth more with good tenants in place.
That's what I was thinking. If I was selling, I'd be concerned that I kicked out a tennant and then the buyer i did this for can't close...
I recently bought a fourplex under VA financing and had this same exact issue. With my initial offer I had attempted to get the owner to pass a 30 day notice tp one of the tenants. He returned the offer and one of the changes was that he had refused to pass any of his tenants a 30 day notice. I could easily see why anyone would refuse to do this..
I believe you have 60 or 90 days to occupy the unit under FHA financing so just make sure to serve a notice to vacate quickly upon acquiring the property.
Maybe try offering a higher EMD along with this condition to entice the seller?
Just go through the legal procedures.
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