BiggerPockets

I am working on a deal right now for a 3 family, the numbers look good and the seller is offering owner financing, which is attractive, also he is negotiable on price. There is currently one vacancy and the other two apts are rented out without leases, last months rent or security. Do most investors choose to have the seller evict all of the tenants before the sale goes through and have a vacant prop? Only problem with this is short term carrying cost until vacancies are filled. In the long run this strategy would probably save money because these current tenants sound like they would be problems for me if I buy. I would prefer to screen all tenants myself.

If I do request that the apts are vacant I will also have to paint and possible recarpet, that is also an expense to consider.

Any thoughts, also do these associated costs such as repainting, recarpet and finding new tenants factor into sale price and by how much? Thanks for the feedback.

If you are in a state where it is difficult to get tenants out, ask for the building empty and screen your own tenants.

Other than that, I'd probably leave the tenants in place until they caused me trouble. Clean up the vacant unit and get it rented. Then you serve notice on the worst inherited tenant and clean that place up and pick your own tenant.

Not all inherited tenants are bad. You won't know until you've had actual business dealings with them.

Most important, put it in your offer that the seller can not enter into any new contracts with his current tenants nor obtain a new tenant for the vacant unit.

Before buying, verify with the tenants what they are paying and about deposits. After you own, have them sign your rental agreement.

A note here: if you go to view and one of the units is full of trash and bugs with holes punched in the walls, ask to have that unit vacant at close of escrow. You know right off the bat, you'll want to get rid of that tenant so let the seller do it.

Is this your first investment purchase?
If it is, here is my advice.
1) Seller financing can be attractive - make sure you understand the terms (int rate, pmt, etc) and negotiate the most favorable for you. Remember, the seller is in a pinch, otherwise, why would he be offering to be the bank?

2) If the seller is willing to lower the price, by all means, take him up on it. If you don't upset him, then you're offering too much.

3) Leave the tenants in place. After you purchase the property, go to each of them and have them sign a lease.
Then just focus on renting the 3rd unit.

Very straight forward.