Hello all! We may be putting a (very first ever) offer on a “Tenants in place/occupied” property. What kind of questions/ things or red flags should we be looking out for? Is it appropriate to ask about the tenant, rent amount? Should we get inspection done even if the property is ”Being sold "AS IS" Inspections for informational purposes only” ? Do we talk to the seller directly or their agent? Thank you so much in advance!!
Investor · SC NC, VA · Member since 2020 · 1k+ posts · 756 votes
5y
Hey copies of leases which should also show the amount of funds being held in security deposits. You also need to know currency of rents (seller owns any past due, you start fresh). You also need to know any actions against tenants, any eviction notices in the past, any pending dollars to be withheld from deposits, really, any issues at all.
Real Estate Agent · Chicago, IL · Member since 2018 · 1k+ posts · 1k+ votes
5y
Hi Athita,
If your offer gets accepted, you or your attorney should request all tenant leases and the rent roll for the property. You should also request bank statements to verify that the landlord has in fact been collecting the rent amounts specified in the lease and on the rent roll. If they are unable or unwilling to provide the information, I would consider that a red flag.
I always recommend that buyers get an inspection of the property, whether it's sold as-is or not. It will give you insight of the overall condition of the property and repairs that should be addressed ASAP. Some things noted in the inspection report will be items that you should keep an eye on for future reference or homecare. Unless it's a FSBO (For Sale By Owner), you will likely be communicating with the listing agent, which your agent should be doing for you.
If you have the opportunity, talk to the tenants to gauge their overall experience in the property. Do they have a good relationship with their landlord? Is the landlord prompt about making repairs, or is there a bunch of deferred maintenance? If the tenants don't have anything nice to say about their landlord, their relationship could be strained. Sometimes landlords sell to get away from bad tenants.