Rehab Loan on 4-plex with 3 Occupied Units!

[Tim Kelly]

Greetings BP,

I am under contract with an owner-occupied 4-plex in which I am using a VA rehab loan. I only focus on medium and large multi-family properties for my business; however, I'd rather house hack then remain in a SFR, for obvious reasons, so I am new at this part!

3 of the 4 units are currently occupied so my main concern is what is the best approach with informing the tenants their units are about to undergo rehab, the rents will increase upon renewal, and the utilities will be transferred into their names?

The contractors will be conducting walkthroughs to get their bids next week so I am not certain as to the extent of the rehab or if the tenants will be able to remain in their units during rehab yet.

Anyone have experience or lessons learned from a situation like this?? 

I would like to involve the tenants in choosing trim or finishes or paint colors to ensure they know their opinion cares.  Figured that may help ease the pain!

Thank you all in advance and Happy Thanksgiving!

Tim Kelly, Kelly Housing Group

[Tim Kelly]

@William Allen @Jay Helms

Thanks, will do.  Yes, the seller hasn't been the most cooperative to deal with but that's why it's an ideal property.  Very much under managed, under market rents, deferred maintenance, solid location, etc.

I was unable to use the VA Rehab 0% down loan due to the rehab exceeding the $35K threshold; so I am pursuing the 203K.

I am actually looking for one more 203K approved contractor.  My agent was only able to find two and I was hoping to get a least 3 in there.  Any quality contractors come to mind?