3 units...1 uninhabitable, 1 unknown tenant, 1 squatter

13 Replies

I'm considering buying a "triplex" (its really a duplex and a SFR on the same lot" It's in a C+ neighborhood. Fixed up it would cash flow very well. It's located in Missouri, and is an REO. It's on the MLS

My realtor (I live in Nevada, so this is long distance) went by, the downstairs unit has a tenant that claims to have been paying rent to the owner, unassumingly to whoever lost the house. The upstairs unit has been gutted and isn't inhabitable, and the SFR out back has squatters.

I'm likely just going to run away from this deal. However I'm curious how easy it is to evict people in Missouri.  I'm mainly interested in the situation with the owner losing the house and the tenant who claims to have been paying rent.  If that's actually the case, what rights do they have?  

Anyone think this tunnel could have light at the end, or just run away?

You'd be walking into a sticky legal situation and you can probably expect that the vacancies (including the "paying" tenant and the squatter) would carry for at least 3 months, given that they'd likely have to be evicted and that can take a good bit of time. Make sure that that at least that vacancy cost is priced into your projections. 

If you're particularly excited about the property and the local market, and you have cash to burn to float the property while it gets stabilized and rehabbed... consider passing on this deal. It's a lot to walk into when there's likely other options for a purchase.

Peter MacKercher, Real Estate Agent in MO (#2010004223)
(314) 210-4414

Much appreciated. I like the idea of passing this up, on the other hand I’m ok with babysitting it 6-9 months if the end result is 3 well rehabbed cashing flowing units.

I will pick the phone contact a lawyer see what the fees are or Email.

My take is run not to walk.  This can be a night mare. How do you know it is not to be a redtagged home. If it is in St Louis or downtown SL bye bye.

Looks like some pretty good advice given so far. But I'd like to know more details. 

Where in MO is the property located? What sort of "deal" do you think you are getting? Did you take into account eviction/rehabbing/property management fees when doing your property analysis?

Stepping right into an eviction/REO is not something everyone is willing to take on. There is much more low-hanging fruit to pick.

Originally posted by @John Ching :

Looks like some pretty good advice given so far. But I'd like to know more details. 

Where in MO is the property located? What sort of "deal" do you think you are getting? Did you take into account eviction/rehabbing/property management fees when doing your property analysis?

Stepping right into an eviction/REO is not something everyone is willing to take on. There is much more low-hanging fruit to pick.

It's in Saint Joseph. Each unit would likely rent for $600-$650 a month, and all in I believe purchase and rehab could be done for $100,000. The numbers work out really well, at least on the surface.I was really heavy handed on the repairs since my contractor hasn't been able to get inside. I suppose the risk is, upon buying the place, they're so far gone they'd have to be knocked down. I guess that's a risk with any REO you can't see before you buy.

 

I would suggest starting at the local REIA(s) in/near St. Josephs/St. Louis area. The members would be able to give you savvy advice. At a minimum, I think they'd have a good RE attorney or two for you to have a consult with.

Those numbers look good to me, but, of course, it really depends on the condition of the property.

Use Google, LinkedIn and Facebook to search out St. Joseph area-investors and reach out to them for eviction advice. Eviction rarely turns out to be an easy game. It certainly is never fun. Especially if you are out-of-state and don't have a full team of professionals on speed-dial.

We have 16 doors in the south st louis area and we have no real problems getting tenants out within 30 days of non-payment when going through missouri eviction process but if i were you i would submit an offer at 60% of your arv minus rehab to see if the bank counters... it probably something theyve been sitting on and are probably gonna sit on for a while so keep submitting the same offer with a small price adjustment to remind them theyre losing money.... got that from brandon Turner in a bp podcast

Originally posted by @Pat Jackson :

I'm considering buying a "triplex" (its really a duplex and a SFR on the same lot" It's in a C+ neighborhood. Fixed up it would cash flow very well. It's located in Missouri, and is an REO. It's on the MLS

My realtor (I live in Nevada, so this is long distance) went by, the downstairs unit has a tenant that claims to have been paying rent to the owner, unassumingly to whoever lost the house. The upstairs unit has been gutted and isn't inhabitable, and the SFR out back has squatters.

I'm likely just going to run away from this deal. However I'm curious how easy it is to evict people in Missouri.  I'm mainly interested in the situation with the owner losing the house and the tenant who claims to have been paying rent.  If that's actually the case, what rights do they have?  

Anyone think this tunnel could have light at the end, or just run away?

I would put contingency in the contract to ONLY accept it vacant. You don't want to be dealing with that mess when you have closed the property and you are the owner.  Let the seller deal with it now, or you can walk away from the deal.

An update.

The tenant is real. He’s been getting ripped off by whoever lost the house. He has been paying rent to whoever lost the house. I assume that’s not super uncommon.

He wants to buy the place, the REO company has given him a week to secure funds. If he doesnt, then they will accept my offer.

Gives my realtor and contractor a week to get into all 3 units and see what the story is. Will post how it goes!

Hey @Pat Jackson , the only St. Joseph I know is north of KC.  I hope all worked out, I just got to read the thread.  I am from Metro East side of St. Louis and have only dealt with evictions in IL.  Not pleasant.  I would be interested in how it all turned out for you if you want to share.

Originally posted by @Ames Foley :

Hey @Pat Jackson, the only St. Joseph I know is north of KC.  I hope all worked out, I just got to read the thread.  I am from Metro East side of St. Louis and have only dealt with evictions in IL.  Not pleasant.  I would be interested in how it all turned out for you if you want to share.

Sure. There was a tenant in the duplex who had a lease with whoever lost the house. He was getting ripped off. There was a SFR out back with squatters. My agent and contractor got into the duplex, said there was at least $80,000 in repairs. They couldn't get into the SFR but that was a minimum of $20,000. The REO company accepted my offer of $8,000 but I walked. Too expensive and too many unknowns.

I think it was a smart move, there are more opportunities right around the corner.

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