First Tri-plex! Asking Current owner to evict tenant?

Question

I am getting ready to submit offer on my First MFR Tri-plex. I have spoken directly with owner and price has already been agreed upon. All 3 units are rented out currently, 2 units at $750 and 1 at $650. In speaking with the owners he mentioned the tenant paying $650 needed to be reminded and has had to send multiple pay or quit, tentant always pays.

Can/should i ask for this tenant/unit to be empty upon closing?

Market rents are $900-$950 2br-1bath in area. And i would like to rehab 1 unit ASAP.

Anyone have success going this route?

Thank you in advance

Can/should i ask for this tenant/unit to be empty upon closing?

Market rents are $900-$950 2br-1bath in area. And i would like to rehab 1 unit ASAP.

Anyone have success going this route?

Thank you in advance

Wayne Brooks · Answer

Put yourself in the seller’s shoes.  He is unlikely to vacate the unit because if you can’t/don’t close he now has a vacant unit.....unless you put up a Large non refundable EM.  You can sk, if you can convince him you truly have the ability to close and if not, just take and non renew/evict the tenant yourself.

Greg Scully · Answer

@Patrick McGrath - You can ask, but I wouldn't evict if I was the owner.  They could evict and loose the income AND incur the cost of turning over the unit and finding a new tenant.  The tenant could also fight the eviction and make it more difficult to close the property.

You could offer a nonrefundable deposit that could go against losses should you fail to close.  If you close, it would just apply to the purchase price.

Anthony Wick · Answer

@Patrick McGrath

First, this is not an eviction since the tenant is MTM. Put in your Purchase Agreement that the unit must be delivered empty at close. The seller merely gives notice to tenant of the termination of their lease. Also, put in PA that no new leases are to be executed after PA is signed. Ignore anybody telling you to take on this tenant yourself. Why would you?! Extra work for you as soon as you close? No. If seller is disagreeable then move on.

John Corey · Answer

Figure out what it would cost you to terminate the tenant after you take title. Then decide if you are prepared to pay the seller to do the work rather than take it on yourself. As someone else said, the seller will not want to reduce the income they receive and then you fail to complete.

Mike Freske · Answer

Do they have leases?

Patrick McGrath · Answer

Anthony - completely agree, thank you for the insight and words of wisdom.

Bill B. · Answer

Zero chance I would evict a paying tenant because someone said they were going to buy. Wouldn’t even have to be a dishonest buyer. Could be as simple as their bank saying, well, now you only have this much rent coming in, you no longer qualify, so no sale. But also could lead dishonest buyer to renegotiate the price after the vacancy.

I understand you’re trying to punish the seller for being honest about the late paying tenant and telling you something they didn’t have to... But still...you talk about “market rent” being 50% higher. Assuming you plan to raise rents you’ll be dealing with the same issue with them. Learn how with tenant 1.

Patrick McGrath · Answer

@Wayne Brooks

I could always do 3 Months rent at current $650 rate if I do not close.

Seller is divesting portfolio, this is 1 of 2 properties I plan on purchasing from him. This one from the MLS and another 4-plex on seller financing.

Why walk into a headache and lower then market rents if I do not have too? I understand you receive a benefit from taking over this problems from seller with lower purchase price.

But the worst they can say is no, right?

Patrick McGrath · Answer

All tenants had initial 12 month lease that has converted to month to month.

I feel like i would rather have the unit free to update ASAP. The other 2 units more than cover expenses.

Christopher Hunter · Answer

@Patrick McGrath  Hello Patrick.  Yes you can ask for the property to come vacant.   Have you found out what the story is behind why he keeps paying late? Also find out when is his lease up .

First Tri-plex! Asking Current owner to evict tenant?

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