I was hoping to purchase the home with paying tenants already, unfortunately that doesn’t look like it’s going to happen.
I do not own the home yet. But I will!! I’m trying to be proactivate with this situation. I would like to suggest to the seller to acquire a new tenant with my specific lease agreement that I have put together from a compilation of suggestions I’ve got from BP forums and podcasts. Of coarse it would go through the legal process through the attorneys. Hopefully they would agree to this.
Or should I just deal with the vacancy after I purchase the home?
My question is how can I make this into a win/win situation? I feel like my thinking process is in the right direction but not necessarily the right solution.
Hell no on having the seller find you a new tenant before you close....not a chance. ZERO vested interest in getting the right person
Deal with the vacancy (it also gives you some time to deal with deferred maintenance, clean it up, paint etc etc) and find you own tenant. YOU want complete control over that part...
I agree that the seller would be flying nothing but looking for the first warm body with a pulse to sign that lease.
Another advantage is that you'd start with a clean slate once you own it, and you will have some time to do all the necessary repairs while the house is empty. Working on an empty house is significantly easier than working on an occupied house.
Why would the seller find you a new tenant? What incentive would he have to do it, or to find you someone good?
Just hire a property manager to find you one, and make the lease contingent upon the closing of your sale.
Ask the seller to allow you to find a new tennat, you find and screen yourself. You then simply have the seller sign a M2M lease with the new tennat. Do not use your agent to find a tennat, he also has nothing vested and will not screen properly.
You do not state when the closing is but you should not be looking for a new tennat to move in before the 1st of June. May 1st is too soon and will only leave you with applicants that are either being evicted or leaving without giving notice. You will find out when you do your background screening.
I love getting them vacant if I can handle the economic vacancy. I’d much rather find the tenant and show the unit how I like to have them ready.
Jordan Moorhead, Real Estate Agent in MN (#40542303)
@Thomas S. that’s exactly that I would want is for me to take over the whole process of finding a tenant. But the issue now is that I will have to do the minor repairs to get it rent ready and I cannot because I do not own the place. @Stephen Shelton your definitely right about having the place vacant to have the place ready.
@Christine Kankowski Your point is taken into consideration.
Thank you everyone!!!!
"I will have to do the minor repairs to get it rent ready"
If you were inheriting a tenant would you still need to do repairs, if so when would you do the repairs.
Don't let a simple issue like minor repairs dictate your tenant placement.
@Jordan Moorhead I do have reserves for this situation. I was ready for it. It’s just the tenant that is leaving is good tenant with no issues, pays on time, and requires little to no management!!
Looks like I’m hitting the ground running. What better way to become a landlord. Hopefully all the books BP and non BP books, BP education, BP podcasts, and BP forums will flow out of me!!!
@Ravi P. well yes and no! I am aware of what I got myself into and the price is fair. I wish I got a better price but most comps are 75-125k more than my purchase price in a two family. Also I plan to rezone the home for a triplex. The home is in need of renovations but not the tenant side , which was updated to newer finishes 8 years ago. Painting and anything I can do to tenant proof the home and document with the tenant during the initial lease agreement is the goal. I would like to pass on any cost to them at the end of the lease is my intention, if possible.
At this point of the deal I cannot ask for anything else because of the above mentioned. And this is also 203k loan which in itself is challenging to me and to the sellers do to the time constraints, so I do not want to give the sellers anymore of a reason to back out of the deal. Treading lightly!
I appreciate the brainstorming!!!
@Christopher Veljkovic Dude, this is a no-brainer! This is your time to shine (sorry, meant control the asset, tenant screening process, and potentially doing a light rehab lol).
You should be jumping up for joy that the tenant is leaving. Inherited tenants can be a little bit entitled 😒
Hope this helps, Chris. Goodluck. Thanks! - Ola
@Ola Dantis thanks for the enthusiasm! Your absolutely right. Control the situation now that I have the opportunity too!! I will shine!!
Wow!! I’ve become excited more now that the consensus becomes apparent!
Thanks everyone for weighing in! The support has been wonderful and reassuring !!
It's my personal policy (it could change some day - stranger things have happened) to never buy a property with a tenant in it. I have taken over management (for clients) of too many properties with bad tenants already in them to ever recommend it to someone. I'm sure that people do it every day and it turns out just fine, but the time, heartache, and money to get a bad tenant out is enough to turn me off from it. And that's not even thinking of the damage that bad tenant might decide to do on their way out...
I would just take the vacancy and find your own tenant. You have no idea who the current owner would put in there. I'm dealing with a similar situation right now where the previous owner of a building I recently bought put some knucklehead in there to make the listing more appealing, and never did a credit/background check. It would be nice if I wasn't stuck with this guy for a year.
I got a bit screwed on a vacancy right before getting one of my properties. So I'd rather have it vacant like others have said.
I'd get it in writing that you won't close until the place is vacant and in broom clean condition. You risk the possibility of the tenant leaving all their junk behind if not. I can speak from experience how much that sucks!
@Zack Aguilera As of now that it is going into the policy binder (with circumstance of coarse!). This particular tenant has great track record. But you are correct. Maybe the next time or if the owners just put a body in there that could be the bane of my existence for that time being. Not willing to take that chance.
@Ben G. Sorry to hear that. Hopefully things will smooth out with your situation during the lease agreement. But thats exactly what I can't afford or deal with.
@Ryan Evans I'm calling up the attorney tomorrow after I write the email tonight see if I can have the home owners keep the apartment vacant upon closing. Good call! Also, my father is going through that situation right now in one of his units as we speak. Tenant left everything behind after few months of court and a court order. Man what a MESS!
Thanks Guys for the input!!
This may be a blessing in disguise. Now, you can find the tenant on your terms. Use this as your advantage and ask for price reduction. Even if the price reduction is $1K or $2K, it will still cover for some or part of vacancy cost.
@Alpesh Parmar I would take your advice under normal conditions but I don’t believe that would work on these sellers. I’ll keep that in mind for any future interactions in situations like this particular one. Thanks for the input.
Totally understand, @Christopher Veljkovic . All the best!
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