Buying tenant occupied rentals sight unseen

2 Replies

Hey BP,

I have sent out my first direct mail campaign and I have been getting a few calls. Today, I spoke with a lady about her single family property that she is motivated to sell. There are tenants in the property currently, and while she told me if definitely needs some work, she was not able to provide any pictures. She did give me some details regarding the roof, but was pretty vague regarding the interior.

My hope was that I could get pictures of the interior so I could come up with some kind of repair estimate. However, if tenants are in place it sounds like I don't have the option to repair the property anyway. 

How do you guys handle a potentially good deal on a rental that is currently occupied? I want to get a property to BRRR, but this doesn't sound like it would work, right?

Thanks,

Justin

I personally wouldn’t do it if you can’t at least get pictures. I found a house that will be up for auction this week, and it popped up on HAR last Thursday. I called sellers agent and asked about the property. Like you, vague on details, but kept saying “oh it’s livable, it is currently rented out!”  Refused to put pictures up 

I put in an offer and they agreed to let me go see it with my realtor (condition for purchase). It was a bit of a shock. Yes, it is technically livable, but wow. Needs 40-45k worth or work to get 1000 a month rent. We pulled our offer. It is still up for auction tomorrow, and if I can get it for 10-15k I will, but it definitely wasn’t worth what the agent was trying to push. 

Don’t let the seller push you around. Yes, you have to work around tenants need, and I understand them wanting a legit offer with proof of funds before disrupting tenants, but make sure you have a cancel fee in your offer, and refuse to go through if you can’t see it. 

Thanks for your input Bruce. 

I guess I am going to try and stay away from anything tenant occupied, at least for my first deal. Sounds like more trouble than its worth, and there are better opportunities out there.

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