Methods of coaxing foreclosed residents out of properties

Methods of coaxing foreclosed residents out of properties

Lender · Houston, TX · Member since 2012 · 83 posts · 69 votes

Most of my rehab properties have been acquired through foreclosure auctions. As such, I have been faced with a host of situations regarding ways to coax or move foreclosed owners out of properties when they'd really rather just stay for free.

When faced with a foreclosed owner who appears calm and not highly aggravated, I derived a method to simply trade time in the property for their actually leaving the property in relatively cleaned-out condition. I started using this method after experiencing the significant expenses of cleaning out tons of junk that owners decided they wanted to get rid of when they moved out.

Here is a basic contract I uploaded to Bigger Pockets that exchanges additional time in the property for later leaving the property in relatively clean condition.

http://tinyurl.com/86ehwur

I would use this contract also when I was busy rehabbing other houses and I knew I had a bit of extra time before I'd be able to get to the occupied one.

Now with all of this said, I do not recommend trying this with a foreclosed owner who is furious and combative. In those situations, long experience has told me that such a person is more interested in extra time perhaps to destroy the inside of the property or simply to never leave the property at all. But for foreclosed owners who are not angry and combative, the Occupancy and Move-Out Agreement has worked quite well.

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  • Investor · Kalamazoo, MI · Member since 2009 · 1k+ posts · 495 votes
    14y

    I would try this: Trade money for time vs. a bunch of paperwork for time. People will respond to cold hard cash a lot faster in my opinion.

    " Look folks I know you are on hard times and have been foreclosed on. I am the new owner of the property (or note) and my intention is to fix up the property and put it back on the market for sale or lease. My bottom line is that I need the property to start generating some cash or I am sunk! We can do this the easy way or the hard way.

    A. I will offer you $X cash to pack up and go peacefully-leaving the place cleaned out of all your belongings.

    B. We can go to court, where I will eventually win and, you will find all of your belongings laying on the curb.

    Would the cash help you to start over again?"

    * This is where you zip your lip and start listening. They will quickly tell you f they are going to cooperate or not. If they are going to cooperate, your agreement will state that they get the money once the Uhaul is packed and the place is swept clean of debris. IF they are not going to cooperate, you will quickly need to start your court action for eviction.

  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    14y

    Just depends on the level of knowledge of a holdover tenant.

    If they know a similar property will rent for 1,200 a month and you are offering 1,200 to move now but they have a ton of trash to clean up,deposits,moving truck etc. then they will stay put.

    If the courts are backed up it could take 3 months to get out.They save 3,600 that way and leave you the trash.

    Again it all comes down to how smart the holdover tenant is and you won't know that until you approach them.

    Even if they agree to cash for keys I would still file eviction to keep the heat on them in case they change their mind.

  • David MidgettPro Member
    Real Estate Investor · Ocala, FL · Member since 2012 · 41 posts · 67 votes
    14y

    Bobby:

    Great point-- cash for keys is for calm owners.... not the irate ones. The aggravated ones just get more offended and destructive at the offer.

    I like your form, but we keep the offer verbal. In our county in Florida, we get an automatic writ of possession as the foreclosure auction buyer, without further court order. The Sheriff posts and evicts with no additional process or paperwork, as long as no intervening objection or appeal has been filed.

    In our case, a written Occupancy agreement could be construed as a lease. Then the occupant would be able to defend against the automatic writ of possession (even when they didn't do what they were required to do), and we would be forced to institute a whole new eviction action. For that same reason, we never let an owner stay an extra couple of weeks in exchange for them paying pro-rated rent.

    However, if I was in a jurisdiction which already requires an ancillary proceeding to evict following a foreclosure auction, I'd use your form every time!

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