TENANTS & TRUSTEE SALE INVESTING

[Tim Silvers]

As most of us saavy investors and landlords know, a foreclosure no longer wipes out a lease.

Keeping in mind the Protecting Tenants at Foreclosure Act that was signed into effect in 2009 which, assuming the lease was signed PRIOR to the NOD filing, requires the new owner to either provide a 90-day notice to vacate (only if such owner intends to occupy the property) or honor the existing lease, how can investors successfully move out tenants quickly from the properties purchased at the trustee sales, as eviction is no longer an option (unless the lease is invalid)?

Under aformentioned act, a tenant can refuse, leaving the investor holding the property, unable to commence repair work, being illiquid for longer than planned, and worse, falling victim to market value fluctuation (yes, even in 90 days, I've seen values drop 10% or more!). 90 days is much too long for our business model. 45 days is max. We need to be done with the rehab within 2 weeks.
And cash for keys is NOT a guarantee.

Solutions???

[Vikram C.]

Cash 4 Keys should work if you offer enough and negotiate well, as Marc said.

Having said that, you are right that there is no guaranty in these matters and you could be stuck with an emotional tenant who refuses to move out regardless of incentive. Buying at auction is a bit more risky than REOs and is best-suited for investors with deep enough pockets to spread their risk over a portfolio of houses.