Tenanted Duplex Pre-Offer Walkthrough Woes

3 Replies

Hey all,

My woes are multiple, here they are for you.

First, I had two contractors who agreed to do a walk-through and give me an estimate on rehab costs with my agent. Then one of the contractors decided he didn't have time for the project. Then the second contractor never confirmed, and ultimately didn't show up to the walk-through. 

It's ok, I thought. My agent seems quite savvy, and with her walk-through video and commentary, I should be able to at least ask some contractors for bids/know general rehab needs.

After being denied the first proposed walk-through, my agent set up another one. However, upon arrival she couldn't get inside. I don't know the details on this yet, but suffice it to say the tenants of this property aren't going to make any part of this process easy for anyone. There was also garbage piled against all visible sides of the house and in the front yard. The driveway needs repair, as well. It's the ugliest house on the block, but I see value and potential for equity in that. 

I simply can't imagine making an offer without being able to see the interior of the property first. This seems way out of my league as a first-timer. Even making a rock-bottom offer doesn't sit well with me sight unseen.

This is in Iowa, but I am wondering if anyone knows the legal rights I would have if an offer were accepted with these tenants already in place? I know I would have to honor any lease that is already in place with the prior owner, but what I really want to know is how fast and how easily and for how much could I get these tenants out of the property?

Secondly, what do I have, as an out-of-state investor, at my disposal to enable my agent to enter the property for a walk-through?

Thanks for all your past advice, and thanks in advance for your insight with this impasse!

@David Hald ,

Before going any further, ask the current owner about the leases.  Preferably, you get a copy so you can verify.  If it's a month to month, you may be able to give them a 30-day notice immediate after purchase.  At least you'll discover if they have 2 months remaining or 10 months remaining.

I don't think there's any way your agent (or you) can force the current owner to allow a walk-through prior to buying the house.  I've seen houses listed that said walk-throughs were only available with a 2-day notice, or a 2-week notice.  Sometimes occupied properties are listed saying no walk-through at all until a signed official offer has been accepted.  The seller/owner has the right to allow or not allow a walk-through.  

It will be up to you to decide to bid or not bid without a walk-through.

All states I am aware of include regulations allowing owners and agents to enter with official notice. It is illegal for a tenant to refuse access. If the seller is not doing this then they are obviously being deceptive and hiding a unacceptable tenant situation.

Also, out of state or not, your agent is only your front runner. If you are not intending to do a in person inspection yourself before purchasing you should not be a investor.  As a new investor not inspection in person will be the biggest mistake you will ever make in this business. 

You should rethinking whether you are prepared to take such high risks. Trust no one.

Hi David. I have actually been on the seller side of this situation, and it is very frustrating when a tenant prevents a showing to a potential buyer. The best advice I have is to try again but have your agent work with the selling agent to make sure notice is posted that she will be entering and that she has a key. Your next worry is if the tenant isn’t home and has a dog! Good luck and remember if you are having this much trouble buying the property everyone else is too! The seller will also be aware of how difficult it will be to sell in this situation.