need advice on inherited tenant on house I am going to flip

need advice on inherited tenant on house I am going to flip

Investor · Honolulu, HI · Member since 2017 · 45 posts · 20 votes

Well I closed on a property yesterday that I was going to flip. Going in I knew it was tenant occupied but on a month to month (but paying weekly) and it was a fast close and typically I deal with any inherited tenant situation while still in escrow and have some kind of contingency/agreement in place for that but I bought through a wholesaler this time and it was basically a no contingency deal. So after closing I was finally able to get the contact info for the seller and the tenant and she told me she has not given any notice to them except that she texted my info to them when I asked her to notify the tenants about the sale & if she gave them the 30 day notice.  And they were surprised and a little upset that the seller was not truthful to them when they asked if the property was for sale. (great)  Well according to landlord tenant laws they are still supposed to get a 30 day written notice so now that its mine I will have to give them written notice. And I know that legally an email or text notification which the tenant acknowledged isn't sufficient right? (This is Indianapolis) Which will add a few extra days before that 30 day countdown begins, since I will have to get someone there to deliver a notice. This is my first purchase in Indiana and I didn't buy this place to be a rental but a flip so the entity is not set up to handle dealing with rentals and tenants, which is a subject for whole other discussion topic! Depending on how quickly we are ready to start working on the project I'm just wondering if I should do a cash for keys kind of deal in exchange for encouraging him to move out a little early and avoid any holdovers. So just looking for advice from others who have been in this situation. 

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  • Property Management · Indianapolis, IN · Member since 2015 · 111 posts · 94 votes
    8y

    We inherit portfolios frequently that have situations similar in that the tenants do not have leases and they also may not want to pay rent.  I have been advised by our attorney to first post notice and provide a reasonable time for them to leave.  If they try to pay rent do not accept.  Reasonable is 20-30 days.  If they do not leave, then an eviction is your only course.  You will need local assistance. 

    I totally agree, based on your objectives and fact you will not have a local PM, that trying a cash for keys approach might be the most productive.  This may allow you to obtain control of the property more quickly with less risk of serious damage done by angry tenants.  You will need somebody though to administer the transaction.  

  • Investor · Houston, TX · Member since 2016 · 54 posts · 25 votes
    8y
    Gota love these situations - I think you need to assess your situation tho, figure out how much it’s going to cost you to hold the property for the month and what it would cost to pay them to leave. It also depends on how long you plan to do the rehab because you definitely don’t want to be stuck starting the selling process heading in to the fall and winter in Indy. Good luck!
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