How do I handle this tenant situation on a duplex purchase?
I'm currently looking at my first deal which is a very large duplex in the downtown area where I live. All of the numbers seem to check out well so my concern is more with how to handle the current tenant situation. I will be using a conventional loan to obtain the property so I will have to occupy one side of the home for some time. Both sides of the duplex are currently rented out, however they are paying half of what the current market value rent should be which I found out prior to seeing the units. Hearing how much they were paying made me nervous that perhaps the building was in really rough shape, but to my surprise it's a lot nicer than I expected. It'll need paint, trim and doors, all cosmetics. I spoke to the tenants during my tour and come to find out one tenant has been there for 12 years and the other for 3 years... They are paying 470 a month and 550 a month for 3 bedroom and 1 bathroom units that are 2000 so ft each. Units like that in the same area are never under 1000$ a month. Their leases are up at the end of Feb 2018 and as far as I know they have not renewed. My ultimate goal is to take over the property free of tenants so I can renovate one side and rent it as quick as possible and then move on to the other side. What would be the best way to handle this when putting in the offer?