Hi there - I'm currently analyzing a 4 family and each tenant is on a month-to-month (not uncommon in my area, following the initial 1-year lease term). I'm told by the owner that we likely won't be able to get into one of the units because the tenant "never answers her phone or lets anyone in, and has a just-shy-of-hoarding problem." But she apparently pays on time and is completely trouble free otherwise.
It makes me apprehensive not being able to see one of the units before formalizing my offer, so my first question is would this be a deal-breaker for you from the get-go?
Assuming that we can work through this and I can get in to see the unit, I'm curious as to how you would handle this inherited tenant going forward. Would you do a blanket re-screening of all tenants and only allow those who pass your criteria to stay, or deal with each unit as you go, provided they're all current on rent? And more specifically, I can already say confidently that I'd rather not have a tenant that won't be responsive and let me into the unit (with appropriate notice and for good reason of course). So with her in particular, would you provide her a new lease with terms committing her to responsiveness and allowing entry to the unit, as well as cleanliness - basically give her a chance to conform but assume that you'll probably need to evict in short order? Or is there's a better way of handling a situation like this?
Thanks for the advice
Hello @Bryan Watts
This sounds like trouble. (I do not know all of the laws there). I can share my experience with this type of situation, do not buy out of emotion. If this is a great deal and you really want the property I would first see what the laws are with getting tenants out of those units. After you know all those laws, I would talk with the seller about notifying the tenant that you will only (this can be done through the contract) be purchasing the property if they evict the tenant in the time period of escrow, and the unit needs to be investigated while in escrow, or you want a reduction in price due to the lack of knowledge of that unit.
I have inherited a tenant and California is way different and more strict with tenant/landlord laws than most states, but luckily the tenant left without too much muscle (figuratively speaking). We told her we were getting a lawyer and she needed to be out in 60 days. At that point she left, but these situations are not always that easy.
Hi @Bryan Watts ,
Do you know what the current lease says about access to the unit. I would be less concerned with getting in before the sale as being able to afterwards personally.
Just my 2 cents and good luck!
I'm not buying what I can't see. For all you know her son/grandson is cooking meth in there...
Thanks for the input - you guys have affirmed my feelings on the matter.
Thanks @Peter Mckernan , it's good to know about the possibility of having the eviction take place during escrow. That is what I'd be most comfortable with - having a clean slate for when I take ownership. I'll look further into local laws about this.
@Mike Cumbie - waiting on the lease details now actually, so hopefully there's some language in there that can be used to gain access during negotiations.
As a more general question, how would you guys treat the other three tenants? They're all on month to month and supposedly have no issues to speak of. But as a general best practice, would you make them reapply (and then 1-year lease if accepted) or assume them as tenants and turn the units over more naturally?
estoppel agreements will help to make sure they have nothing they are "waiting on or are promised". If they are month to month I would most likely keep them that way for a bit. It allows you to take them for a test spin, raise rents if required after getting in and finding out there are issues. With a year lease you sort of are stuck with them and can't make adjustments.
Thank you @Mike Cumbie , I did some more research on estoppel agreements and this looks like a great best practice for any inherited tenants.
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