Updated over 7 years ago on . Most recent reply
BRRRR with tenants in place
Considering my first multi for BRRRR strategy. What if i buy it with tenants in place? How do I get them out to rehab and add value?
In the case of month to month, can I just raise the rent until they leave? Proceed with the rehab with them in place and then increase the rents? Etc?
Most Popular Reply
If you have a vacant unit you can start the rehab there, then offer the tenant the option to move into the fresh unit on a new lease at a higher rate, and then rehab the unit they were in. If they don't want the fresh unit you could tell them you're not renewing their lease - chances are they won't be stoked about having to find a new place to live, so you might want to consider giving them an option to leave before the end of the lease term without a penalty.
I did this on a 26 unit apartment building that was about 75% occupied. The logistics were complicated, and I lost a few tenants, and it took a long time, but after it was done I had a fresh property with better tenants, that were all paying more on new leases.