How to buy the ugly 4-plex across the street

Question

Hello All,

I just purchased three 4-plexes on the same block a couple months ago and things are going pretty well so far. However, there is one run down 4-plex that is right next to two of my properties that seems to be keeping tenants from wanting to live on this street.

It has always been a plan of mine to try to purchase this 4-plex as well and since I am not getting the tenant interest that I would prefer, I think I would like to approach the owner sooner than later. I looked up an address on the assessors site for the owner, but that is all the info I have.

Questions:

1. How would you approach the owner of this ugly 4-plex? Send a letter? Wait for a For Rent sign to go up in the yard(maybe more motivated at this point)? Ask around to get the owners phone # and call him/her? Maybe a combination of the above?

2. Once you got in touch with the owner, how would you approach purchasing the ugly 4-plex without upsetting him? Just introduce yourself as a new owner in the neighborhood and not bring up the purchase yet or just cut right to the chase and tell them that you are interested in purchasing it?

3. I would like to keep the small reserve fund that I have, so I would like to pursue some creative financing methods such as lease option, seller financing etc. However, I am assuming that since the place is rundown, the seller would be more interested in cash. Would you have this same assumption?

This is a lengthy post, so don't feel obligated to respond to all of the questions. Have a good day!

Steve Vaughan · Answer

Hey @Austin Davis - I would say I recently 'took over some of those' and let them decide. They usually don't ask me for too much more detail (not that I do this everyday or anything!). To my residents I am the manager, not the owner. Has worked well for me!

Steve Vaughan · Answer

Hi @Austin Davis. Great work so far! I like having groups of assets in the same area as well. I might ask a tenant for the owner's phone # in a conversational manner. Try iand catch them while the're outside (vs knocking on the door). Current tenants are fountains of info and generally love to talk (gripe) about what's going on with their property.

When you get the owner on the phone, I would just introduce myself. Say you've purchased a bunch in the area recently. If they see or hear of anything shady going on at your properties to give you a call. See where it goes. They will probably divulge something. Good luck!

Austin Davis · Answer

Thanks, @Steve Vaughan. I like the idea of just leaving out the details.

@Rob Brautigam-I agree that this is an interesting topic and it might be worth bringing to a separate post to get more feedback on it. We will see how much feedback we get.

So far the pro's that I have heard that telling them you are the owner gets you more respect from the tenants and that you can build better relationships with tenants to have them stay longer. I have also heard that you can "put the blame" onto your property managers policies on how things are run if you come into an issue. Last, if they find out that you are the owner, when you have told them you are the manager, they may feel lied to and get upset.

On the other side, I have heard there are advantages of always having separation between the owner and the tenants. Always being able to blame "the owner" for things that come up or decisions that tenants don't like has always been listed as the biggest advantage. I have also heard that some tenants might want to come right to you instead of your property manager if issues come up. Last and biggest thing that I have heard is that if a tenant knows who you are, they can sue you a lot easier if they are upset, where they wouldn't go through the effort of tracking you down if they don't know you.

Any other feedback on this topic would be much appreciated.

Rob Brautigam · Answer

This is an interesting topic, I'd like to see what others have to say... I feel like it would be better to present yourself to the other tenants as the property manager because they will probably be willing to give out more information than if you confronted them as an owner.

Austin Davis · Answer

Great Idea, @Steve Vaughan. I will definitely do that next time I see a tenant outside. Would you recommend introducing yourself to the tenant as the owner of neighboring properties or a property manager? Just wondering who a tenant would more likely be willing to talk to. Also, if I did purchase the property they would know who I am, and I have heard some mixed reviews on having your tenants know who you are, as the owner. Any thoughts?

How to buy the ugly 4-plex across the street

How to buy the ugly 4-plex across the street

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