Property purchase with tenant being evicted?

Question

A property that I did a 2nd look at on Sunday that I'm really interested in that has a 1/1 house on it and a 2/1 mobile home on it I was informed that the tenant that resides in the mobile home is actually actively being evicted. We were excited about the house as the tenant was renting at $275/month and this was going to give us a bit of a financial buffer to not have to rush to get the house repaired and get a tenant in. Only reason I say not rush is that this is our first rental, so we're trying to be thorough in our process. Any advice/thoughts/questions on what all this would entail with the current eviction situation? That's my biggest question right now is the whole eviction process and the best way to move forward if we'd like to purchase. Thanks in advance, happy to answer any questions, just didn't want to make it too lengthy with unnecessary info

Catherine Emert · Answer

@Cory Lucas YES! Make it contingent upon the current owner having the tenant completely out and their move out repairs complete for the return of the security deposit if there is one. You don't want to pick up in the middle of that.

And I hail for the mountains but of a costal state. Our rents are extremely high and vacancies are next to none.

Let me know if you need any other information.

Jack Inman · Answer

@Catherine Emert Is right - definitely make the sale contingent upon the eviction process being completed. I've helped a client buy a deal like this before, and we delayed the closing and the inspection until the eviction was complete. In our case we asked for a big reduction based on the results of the inspection, and the seller accepted the reduction. Sellers with ongoing evictions can be a great source of good deals.

Cory Lucas · Answer

@Anthony Wick thanks for the reply and the great information! Looks like we’re neighbors with you being up in Iowa!￼￼

Anthony Wick · Answer

@Cory Lucas . You can write anything you want in your Purchase Agreement. I would definitely write in; "Unit to be delivered empty and broom clean, empty of any personal property at close". And then, right before close, do a walk through to make sure it is. If it is not, I would delay close or cancel the purchase.

Catherine Emert · Answer

@Cory Lucas I own a real estate brokerage so I help investors a lot. I’d make sure you have you inspection contingency in there, an extended due diligence period that extends until the tenant vacates, that way you can have you inspection after they leave in case there are additional damages. And I always recommend a final walk through contingency after repairs.

As for your prior posts with no responses, that’s such a bummer. Personally I go to the unanswered posts first to see if there is anyone I can help out who may not be getting answers. 😀

Cory Lucas · Answer

@Jack Inman thank you very much for the reply! It is greatly appreciated. Do you have any suggestions on details to ask for in a contingency for an offer? For example, a dollar amount, repairs satisfactory upon inspection, or some other wording? ￼

Truly appreciate the insight. If there’s someway I can repay the knowledge with an area you invest in I’d welcome the opportunity?￼

Cory Lucas · Answer

@Jack Inman thank you sir. Great info, thank you for the feedback

Cory Lucas · Answer

@Catherine Emert thanks. That’s really awesome you do that, cause it was really a breath of fresh air to see your response. Truly appreciated.

Thanks for all the great feedback

Jack Inman · Answer

@Cory Lucas  I'd ask the seller when they plan to have the tenant out, and then I'd make the inspection contingency extend through that date. It's also worth including a clause in the purchase and sale agreement stipulating something along the lines of the inspection will take place only after the tenant has vacated the property.

Cory Lucas · Answer

@Catherine Emert thank you so much! I can’t tell you how much I appreciate you reaching out, I’ve posted a couple of other things in the forums and you are the first person to respond to any of my posts. I was starting to get a little weary of the process, but thought to continue to post. So, I’m very grateful for the information you presented.

Anything further you could elaborate on as far as things to put into an offer as far as contingency goes on the repairs? Doing my best to not seem too needy :-D it’s just that I tried flipping houses a couple of times about 10 years ago and really ate my lunch, so I’m trying to do my best to not catch myself in that trick bag again. ￼￼￼

What areas do you invest in or ways you help others? That way if I am presented with the opportunity to steer someone in your direction in that area where you live, I might be able to repay your knowledge you’ve been so kind to share

Property purchase with tenant being evicted?

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