Our bid was accepted.....now what?!

10 Replies

Good Morning, this is my first post on BP and things have moved a bit faster than I honestly anticipated. My partner and I decided to get into the rental business and after considering what we could afford as a starting/learning point we decided on an area that definitely is not the greatest but the cost of the unit is low and rent is currently 600 on each side (this is a duplex). So the listing price was 49,900, we bid 30000 and he countered at 32000. He's retired and looking to get rid of the property since he lives out of state. Sorry if I'm long winded on this one but here are my questions moving forward....

He has two tenants in there now on a month to month lease, he wants to evict them after the closing and keep the money in escrow until they have moved out. One couple is already looking, the other wants to stay. Is anyone familiar with this offer? Can you tell us pros and cons and how to protect ourself so that no damage is dont in the moving put process. What types of contingencies should we be putting in place to protect ourself?

Like I said, we are totally new to this so we are just looking to see if anyone is familiar with this scenario. The property is in Westland MI (Norwayne) if anyone knows the area.

Thanks for your time and let me know if more info is needed.

Why is it that the Seller wants to evict the tenants? Something doesn't sound right....."closing then keeping the money in escrow...", NO!  At closing the property is yours, the seller is out of the picture, period.

dont tell me it's south of palmer. do not buy there!!

It is just south of Palmer and I absolutely see where your concern would come in, we would not have looked there except I actually know people with multiple units in the area so it actually is possible to make decent money off of the rent, I realize the resale on the units are really nothing.
That was why we are curious on how we should move forward Wayne. He had a deal recently fall through because of financing and he doesnt want to lose a months rent if our doesn't go through. He's an attorney so I wouldn't think he's up to complete no good, I'm more curious about protecting us in the process and what tyoe of contingencies we should be putting in....if that makes sense.

Seems like a strange situation that the seller wants to kick out the tenants of a property that he is selling.  There do seem to be a lot of risks here - the property likely can't be financed or sold easily and something is less than ideal with the tenant situation.

Has the seller provided records of tenant rent payments?  

@Amy M.

 Okay then, is it You who wants the tenants out at closing?

He doesn't necessarily want the tenants out, he has a month to month lease with both sides, they both have been there for over 2 years so there has been no problem as far as that is concerned. The tenant on the one side lives in filth, I went in the place and it's bad. The other side is recently married and are already planning on moving. I would have no problem letting tenants stay except the one side is really that bad, I would like to be able to go in and fix up what needs to be done then rent based off of our terms and conditions. I don't know how I feel going into this based off what someone else has in place. Are we looking at this the wrong way? Would you let someone stay and then fix up the place after they move out someday? Like I said, we're new to this so suggestions are appreciated.

Originally posted by @Amy M. :

It is just south of Palmer and I absolutely see where your concern would come in, we would not have looked there except I actually know people with multiple units in the area so it actually is possible to make decent money off of the rent, I realize the resale on the units are really nothing.
That was why we are curious on how we should move forward Wayne. He had a deal recently fall through because of financing and he doesnt want to lose a months rent if our doesn't go through. He's an attorney so I wouldn't think he's up to complete no good, I'm more curious about protecting us in the process and what tyoe of contingencies we should be putting in....if that makes sense.

 do not invest there!!!

sure, they cash flow great and those can be purchased for $25k per duplex, but have you walked the area at night? have you driven at night? will you be able to knock on the door and look for your rent at night? the answer is "no", correct?

i have 19 and i wont touch that area. for a newbie it's silly to jump in that area. 

Thanks for the input

I bought a drug house and asked the seller to evict the tenants by close of escrow. The seller was concerned about the same thing -- what if the deal doesn't go through, blah blah blah. I told him that if I walk out after removal of the contingencies, he gets to keep my 10K of deposit. He can look for new tenants with that 10K.

I wanted everything to be done by close of escrow. If you want the tenants out, then put it in the escrow instruction. I physically drove by to confirm the place was vacated before I authorized the close of escrow. Once the money goes to the seller, what do you have to hold him accountable besides his words?

Thank you Fay! That was what I was looking for. We have a similiar amount for deposit so I think we can negotiate using that as a tool. Thanks again for the comment, this gives us an idea on how to move forward.

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