How to buy multi-family with no lease tenants

[Darrick Lowe]

The majority of multi-families I have been looking at have tenants in place without a lease.  They are paying month-to-month.  Tenants are well protected here in NY.  Let's assume that the Seller provides bank statements that shows the tenant is paying rent every month,  the Seller is not willing to provide the property vacant, and my goal is to buy and hold.  What other things should I request from the Seller when presenting an offer, if anything?  I have been informed to make sure they are not rent stabilized.  Should I include a contingency that says current tenants must sign a lease with me at or before closing, or is this going to kill the offer?  Or I could also have the Seller provide a notarized statement that states that tenants are free market on a month to month tenancy, with no protections or written agreements.  Though I am not sure how to protect myself should the tenant choose to destroy the apartment, for example.

[Nathan Gesner]

Four options:

1. Suck it up and take your chances. Without written lease agreements, tenants are considered month-to-month and should be easier to get rid of or you can put them under a written contract with proper advanced notice.

2. Provide the seller with your written lease agreement and require him to put all tenants on a written lease. Do this far enough in advance that you have time to confirm.

3. Make the purchase contingent on the units being vacant. Closing will take place 30 days after the units are verified vacant by you. Close on the property and start fresh.

4. Don't buy the property.