Occupied Rental that needs Renovating

[John Maynard]

I'm a new investor looking at a 3 unit building to purchase that already has 3 tenants. Each unit needs rehabbing, so my question is: each unit is rented with the current owner month to month. I want to purchase the property and start renovating one unit at a time to not only increase the rents to market value, but also add overall value after the purchase. What do I do with the current tenants? 

[Nathan Gesner]

I agree, mostly.

I would give all three of them notice of your intent. See if any of them are willing to move out in 30-60 days and start renovating that unit. Keep the other two on notice that they're next and try to negotiate a mutual agreement on when they vacate so you can spread the vacancies out.

I don't know why you would even consider cash for keys. The tenants may be willing to leave voluntarily. If not, you give them notice and move them out. If they refuse and try to stay, you evict. Rewarding them with cash for violating the law is terrible advice and should only be used right before sending three burly cousins with baseball bats.