Milford, CT · Member since 2018 · 5 posts · 6 votes
I'm looking at a 2 family house that has month to month renters. I am looking to make an offer. How would I ask the seller to verify the rent collected?
@Patrick Risko have the tenant sign an estoppel that verifies the rent amount, security deposit, length of lease term. If you are working with an attorney they can create a simple one page document for you.
Ask for a copy of the rent roll. They may not have one, but ask anyway. You want to insure you don’t have a situation where you have economic occupancy. That is tenants occupying the building, but not paying rent. On the surface it seems great to buy a building with tenants already in it, but are they paying and on time. I would ask for a copy of the lease. Have they always been MTM or did they originally have a year lease and now it’s MTM. Is there any security deposit? If there is a security deposit you are entitled to it, but you need to ask.
But if they don't have rent rolls and the tenant has not signed a lease in the last couple of years. Is there another way to verify what rent was paid?
I will check on the security deposit. I didn't think of that one.
@Patrick Risko have the tenant sign an estoppel that verifies the rent amount, security deposit, length of lease term. If you are working with an attorney they can create a simple one page document for you.
@Patrick Risko you can ask to see the bank statements related to the property. Ideally, it would be separate from the seller's personal finances and you would see the monthly deposits.
Note, this would be a part of due diligence and likely won't be provided prior to you offer. Be sure to work with an agent who provides adequate contingencies for due diligence. If the seller does not produce the documents, they could be lying to you.
If I was the seller, I would tell you to take a hike.
You don't know your market, you don't know what a property would/should rent for.
You are a tire kicker.
You are wasting my time.
As an example, I had a realtor show a duplex we have for sale. We happened to have one unit open, so they got to do a long walk thru, My realtor told them that the other side of the duplex was identical. They wanted to see it anyway. I told them to take a hike, I am not going to disturb a long term tenant for a tire kicker. They were told that both sides were identical, and there was no need to see it without a contract.
In my opinion if you know a deal when you see one, then you would have already made an offer. Don't waste their time.
Thanks Arlan, but I was asking how to verify rents with my offer. I wouldn’t ask for rent verification without an offer. If the seller were to accept my offer I wanted suggestions on how to verify what they are telling me.
Well, If they accept your offer, you should get copies of the leases at closing. A seller may say anything to get a property sold. I give rent rolls for large properties, but smaller stuff, it is really irrelevant. You may not want their tenants anyway. I just tell prospective buyers that they are rented and how long. Either way, whatever works for you.