I am looking at my first investment property for a buy and hold rental. It is a duplex with the current owner as the occupant and their son as the tenant of the other unit. The parents are moving out. The son would like to stay. I don't know if there is any contract existing with him since he was a relative, but will find that out before we make an offer. What do I need to watch out for with this special circumstance? Any words of wisdom since this isn't the most common situation?
Close escrow and sign a new contract with son. You will probably want him out to start fresh. He probably wants to stay because the rent was cheap. Expect a couple month roller coaster ride when inheriting tenants.
Thanks. That is one of my biggest concerns with buying an occupied property.
One of my criteria was that a tenant can't use a relative as a reference. So, if it was me, I'd tell them both sides must be vacated as a contingency of the sale.
Odds are good that the main reason they're selling this place, is because they have a Failure to Launch kid LOL. Don't let them fob him off on you :-)
If for some reason you still want to consider letting him stay, then have him apply and meet all of your other criteria. Odds are he won't qualify anyway.
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