Three main theories. Firstly it is the intervention of the 'Powers That Be' in order to save Faith for a higher purpose (as we later see with Kate). Secondly that the pimp issued a general invitation when talking to Cordelia at the hospital allowing him to enter in order to fight Faith. Thirdly that the pimp wasn't the legal resident, that he was squatting or had gained the place dishonestly therefore negating the need for an invitation.