BRRRR when you have tenants

[Jeff Hudak]

He is the story. I am looking at a 4-plex that has 4 tenants paying low rents. Say 800 each. All of the units need to be updated about 8-10k each unit. By doing this I can increase the rents to comps in the area of about 900-950/mo. Purchase Price is around 205k and the ARV is 240-250k after doing the upgrades. I am on the fence with this project because I'm not sure how easy it will be to either:

1)See if the want to leave or stay for the Reno

2)Cash for Keys - what will this cost met

3)Will they be able to pay the increase in rent after Reno.

What are your thoughts?

[Reece Iovine]

Question. Purchase price 205K 40K for reno ARV 250K? That's terrible. You are in it 245K and it is valued at 250K. Am I missed some detail here?

If the tenants leases are in place you cant move them out until the lease ends or you do cash for key or some other agreement.

I would not try to reno while they live there. I'd recommend just renovate as each unit turns over then rent to someone new that qualifies and is willing to pay increased rent.