Rental Property Investor · East Texas · Member since 2022 · 6 posts · 4 votes
I recently purchased a duplex with owner financing and the seller has 6 units (a quad and duplex) a few blocks away that she is considering selling me with a similar deal. The problem is that 3 of the tenants are elderly and on fixed incomes and the seller is concerned that they will need to move out when I take over and increase the rent. The current rent is well below the market avg and the property will have a CoC of about 15% with a conservative cashflow of approx $950 a month. They are currently paying 450-500 a month and I plan to increase it to $750/month. The seller is reluctant to sell if they have to move due to and increase. I'm looking for a creative way to work the deal so she will agree to sell. I am not opposed to traditional financing but I will most likely have the same problem. I would prefer owner financing for obvious reasons. Any help is appreciated.
Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
4y
You could agree to not increase the rent on those 3 existing tenants more than $50/mo for the next year, understanding that you won't be improving those units until they move and explain that hopefully that will give them ample time to request assistance from a Section 8 or other assistance group to help them pay closer to market rents after that year is up. Knowing that you're willing to try to help them stay, if possible, may ease her mind.