Buying & Selling Real Estate Discussion

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Matt Sterling
  • Investor
  • Brownstown, IN
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Would you buy an 8 unit with a sex offender as a tenant?

Matt Sterling
  • Investor
  • Brownstown, IN
Posted Jul 27 2015, 09:21

I was all set to make an offer on a 8 unit(4 modular duplexes) last Monday 'til I found out there was a sex offender in one of the units Sunday night.  I looked up his court case and found out it was for 4-5 years of molestation of his girlfriend's daughter from the ages of 6 to 10.  He appealed his sentencing and this quote came up in that case.  "In addition, the trial court noted several other aggravating factors, including xxxxxx‟s failure to successfully complete probation, his pattern of physical abuse toward women, his history of substance abuse, evidence of multiple instances of molestation toward the victim, and his violation of a position of trust."

He was sentenced to 5 years, somehow he only served 1 and got out.  The property manager tells my realtor on Monday that he told them it was a young girlfriend situation and that is why he is on the registry, I told them that it was bull and the real reason he was on there.  The property manager says he has been a good tenant for 2 years and is now engaged and goes to classes and is trying to get his life back together.  

His lease isn't up til February.  I haven't seen his application and see if he lied on it when talking about the sex offender status or he just told "his story" to the property manager and there isn't a record of him lying. 

It is currently bank-owned and we asked the bank if they would consider an offer contingent on them removing him before closing but they got back to us today saying they would not.  So here I am now.   

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Ryan Klemetson
  • Investor
  • Moline, IL
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Ryan Klemetson
  • Investor
  • Moline, IL
Replied Jul 28 2015, 20:37

Great due diligence that some people forget to check. To me it comes down to the "sleep-ability" factor. I would to worried about the tenant to get a good sleep at night. My wife and I once almost bought an excellent property, but people in the neighborhood let me know that the next door neighbor was a sex offender.

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Jai Sookhakitch
  • Investor
  • Chicago, IL
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Jai Sookhakitch
  • Investor
  • Chicago, IL
Replied Jul 28 2015, 20:55

@Matt Sterling Sounds like a great niche Market. You can start by evicting all the non sex offender tenants. They will surely ruin the vision of a home for sex offenders. They will be flying in from all over the US. You can even up charge the rent. It's great to see someone with an open mind taking care of the sick. Perhaps even apply for some sort of grant. Good luck on your venture. 

Ok now that I have your attention, Do the deal if the numbers make sense. Try pushing the bank even lower now that you realize there is a sex offender. You can have them out in no time and you surely will get a good deal out of this. 

Good luck!

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John Hamilton
  • Real Estate Transaction Engineer
  • Jacksonville, FL
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John Hamilton
  • Real Estate Transaction Engineer
  • Jacksonville, FL
Replied Nov 25 2015, 09:03

I would print off the sex offender website information and send it to all your tenants as a PSA. Don't mention the renter by name or identify. However, stress that due to the nature of these type of criminals, their children are at risk.

I would follow someone else's advice and call the PD to see if he is indeed registered.

This guy being so friendly with little girls is a sure sign he will do it again. Make their life extremely difficult to rent from you. Constant inspections, have police cruise through the apartments every now and then, warn the neighbors with little girls that someone in the neighborhood is a convicted child molester. 

Hopefully, he will be so frustrated that he will move on. Tell him you'd be willing to break the lease at any time. No questions, no money, just go.

To protect yourself and your tenants and their children, consult an atty and the PD.

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Meghan McCallum
  • Specialist
  • CHICAGO
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Meghan McCallum
  • Specialist
  • CHICAGO
Replied Dec 7 2016, 06:57

Guys! Stop making this hard. OF COURSE YOU CAN remove them as a tenant. When I take over a property with existing tenants I find out the terms and length left on ALL their tenants. I ask for a copy of their credit and background checks from the current owner. Most likely, if you have one living in the building its likely the last guy who owned it was a slumlord and lets just anyone in, so they may not even know that they have a tenant on the list. SO, use the info as a bargaining tool. Again, most of these people also rent month to month. So, try to add into your terms of the purchase that each tenant agree to a background and credit check. If that doesn't fly, why you buy it all MTM's should convert to YOUR lease which DOES NOT ALLOW FELONS. It's ok to not allow them you know. You may have to offer cash for keys (cheaper than eviction) but it's your building and as long as you don't discriminate against a protected class (FELONS ARE NOT) then you get to choose who lives in your buildings. Also, if you don't know what you can and can't say and to whom PLEASE brush up on that tid bit of info. DON'T ASK IF A TENANT HAS KIDS...illegal. Also, look up what pets have to be allowed and how to handle service dogs vs. emotional companions.