Rental Property Investor · Cleveland, OH · Member since 2018 · 21 posts · 8 votes
Hi all, I am wondering how you approach a property purchased as foreclosure to find our if it’s occupied. Can I just show up, knock and if no one answer kick the door in? (I wish). If it is occupied how should I approach the person living there?
Would approaching them and trying a cash for keys deal work? Legally? or should the eviction process just be started immediately?
Occupants are still going to have rights whether they are squatters, delinquent with rent, etc. You'll probably need to give a change of ownership notice and notice to vacate, then if they don't vacate you'll have to evict. An "on paper" cash for keys deal might give you a stronger case if they refuse to move, but you still have to do it by the book!
Just storming in might put you at risk of getting sued or physically harmed, so this might be one for a local attorney to handle.
Occupants are still going to have rights whether they are squatters, delinquent with rent, etc. You'll probably need to give a change of ownership notice and notice to vacate, then if they don't vacate you'll have to evict. An "on paper" cash for keys deal might give you a stronger case if they refuse to move, but you still have to do it by the book!
Just storming in might put you at risk of getting sued or physically harmed, so this might be one for a local attorney to handle.
Work through a distressed property realtor (like having a CDPE designation). They are licensed and know the procedure. The occupants are smarter and legal savvy than most people think. Some are armed. You can be charged for harassment. I have seen people coming out with a black eye. @Ryan Evans is correct.
I just went through this trying the nice guy approach and I got played like a cheap guitar. The move out agreement started out with hugs and thank yous. Myriad sad stories of hardship, life's unfairness and five move out date extensions after closing it was nasty, high drama and unsafe. These guys had not paid the mortgage in 18 months. They were players with nothing to lose, I was an idiot. Fortunately, the mom and adult sister of the male adult occupant were wonderful people and contacted me regarding what I was up against. They ran interference and assisted in getting the occupants out. Without them, best case I wasted 45 days of high drama; worst case I could have gotten my butt kicked or shot. I still look over my should when I am there doing repairs. My lesson learned - I'll never knock on the door again. The eviction will be formal, by the book with an attorney handling the process.
This highly specific under state law. In Kansas, you would simply get a writ of possession from the court if the occupant was a party to the foreclosure. If there are occupants, consult a local attorney experienced with foreclosures. Not legal advice.
I do this a lot in Cleveland. I stay unemotional and business like. I offer a cash for keys deal and a 3 day notice at the same time. They have 3 days to decide to take the offer, and I never give them more than 7 days (including the 3 days for the notice) to physically move and hand me the keys. If you do it this way, you can proceed quickly with the eviction in the event they don’t move out. I have found most people agree to the cash for keys but don’t move out as a stalling tactic. Because I gave them the three day notice at the same time as the offer, I can move quickly to the legal eviction process with my attorney when they are not out of the property on day 7.
Things you should never do in my opinion: name call, threaten, raise your voice, treat people disrespectfully, argue or be sarcastic. Obviously nothing illegal like entering the property without legal notice, changing locks, shutting off utilities, etc. I don’t enter the property unless the tenant lets me without a fight/argument, and many times I just wait to go in until after they vacate. The tenants tend to be emotional and want to fight/argue. It’s frustration on their part, but I don’t participate in those types of events. Stay above it and do your job - and evicting people is part of the job for a real estate investor.
I ALWAYS stay above board and legal and I always win at eviction court. Because I’m respectful and follow the law, I’ve never had a problem.
@Anthony Reyes We just did this. We served a 3 day notice, she stayed. Offered cash for keys, she stayed. Went through eviction process legally, she stayed. We changed locks with constable approval and present. She broke in and locked us out. She went to jail 4 times. Sheriff sent in dogs, she hasn't been back.
I agree with the other responses. Visit your courthouse, speak to the sheriff, and to a local real estate attorney and they can let you know the laws and process. You want to follow this to the letter of the law. I typically start out with sending a registered letter by mail explaining the situation and requesting they contact you. I then follow that up with a hand delivered letter but don't deliver yourself, you can typically pay a bail bondsman to do this.
If you offer cash for keys give them a few options: two weeks, one month and 45 days. Have them pick one and sign off. Require the home be in good broom swept condition, with no personal property or trash left behind. This would include trash at the curb. If they don't follow it, they don't get the money. Explain this in detail, and if possible have someone else handle this process. It will keep your liability low if things go wrong. Bad tenants want the owner to act out so they can have an arguing point.
The best lesson I have learned is no matter what process and agreement you have, proceed with the eviction. Tenants and holdovers will agree to any process possible in order to delay the eviction process and then they don't leave. I just explain to the tenants that the eviction process is underway for legal purposes but you want to work out a deal outside of the eviction. Always be nice and professional but firm and always follow through with what you say you are going to do. If they see a way to exploit the process they will.
I have worked on many of these for Freddie Mac and this was close to their process and in most cases it worked.
Outside of the occupant being the former owner/borrower, or immediate family of former owner or borrower, you are going to have to give them a minimum of 90 days or a maximum of the remainder of a valid lease (If applicable. If lease is not valid, ie, not market rents, still gets 90 days). Whether they pay rent or not. 3 day notices, notice to vacate, all of that other stuff will only put you into trouble if you do it before 90 days have passed since foreclosure.
You can offer cash for keys, you can be a jerk or you can be nice but it would be naïve in my opinion to think you can do anything before 90 days. Nothing in any state law would trump the Federal rules if the Federal rules are more restrictive. No sheriff, no attorney and no courthouse is going to put this occupant out before 90 days.
Anyone that has evicted, or threatened to evict, and succeeded in removing the tenant before 90 days, got lucky from a tenant not knowing their rights.
You basically have two choices. 1) the legal route with all proper paper work and a considerable investment of time and money. 2) or go in at night with a few friends and "persuade them to leave" on their own.
I prefer option 2 but if you decide this route do not approach them in advance with any other offers, do not meet or speak to them at all before you visit.
To find out if someone is living there ask a friend to knock on the door making inquiries and have him pump them for info.
I am not advising you on what to do simply providing options.
You basically have two choices. 1) the legal route with all proper paper work and a considerable investment of time and money. 2) or go in at night with a few friends and "persuade them to leave" on their own.
I prefer option 2 but if you decide this route do not approach them in advance with any other offers, do not meet or speak to them at all before you visit.
To find out if someone is living there ask a friend to knock on the door making inquiries and have him pump them for info.
I am not advising you on what to do simply providing options.
Option 2 is a lot more exciting as it could put you on the news, in jail or get you shot, or all of the above.
Hi all, I am wondering how you approach a property purchased as foreclosure to find our if it’s occupied. Can I just show up, knock and if no one answer kick the door in? (I wish). If it is occupied how should I approach the person living there?
Would approaching them and trying a cash for keys deal work? Legally? or should the eviction process just be started immediately?
Said property is in Cleveland, Ohio
Thanks in advance.
If they willingly leave you've got no issue so nothing illegal about the cash for keys strategy. If it works great if it doesn't you've only got one recourse and that's an eviction. I evict roughly 100 people every year in the Cleveland area. Typically it takes about 6 weeks but that is for standard tenant evictions. I've only ever been involved in a couple foreclosure evictions. FYI that process takes considerably longer & will be a bit more costly but you don't want to try and cut corners and do it yourself or hire a cheap attorney. Hire a pro and ensure it goes as smooth as possible.