In the process of buying a Duplex that has both sides occupied with long time good paying tenants. It will be my first property. Should I keep the tenants and use a conventional loan or make one of the tenants move out so I can move in for a year?!?? Any help is appreciated.
Even when an investor buys a property with existing tenants the terms of the tenants Lease Agreement must be adhered too. EX: a 12 mth lease stipulates they remain for the duration of the signed lease. If the terms of the lease indicate a 'hold-over' and is now a month to month tenancy, then you may give the tenant 30 days notice to move out. Or, according to your states rental laws, 60 days. Either way, if the tenant is now paying month to month after an annual lease finishes and they are now a 'hold-over' tenant paying month to month, then to make their move out 'nice' and easier for them, give them a written 60 day notice of termination of their hold-over month to month tenancy.
I would do an analysis and see which option makes more sense. Some of the things to take into consideration:
- if you do not move in and let other tenants stay there, what would be your monthly expenses out of pocket? (however much it costs you to live in another place minus CF from the duplex). If it costs you more to live elsewhere vs moving in, then I would move into one side of the duplex.
- do current tenants pay market rent?
Thank you for the info!!! The tenants are currently under contract and are month to month. If I did an FHA loan what would be the time frame, from time of purchase, I would have to fulfill the live in requirement?
I am currently staying with a family member rent free, minus groceries and miscellaneous house work, with no time frame to leave. I can't afford the 20% down to avoid PMI, without depleting all my cash resources.
If it's not owner occupied, you'll probably be required to put 20% or 25% down