How to go about this MultiFamily Issue?

7 Replies

I have a seller who is motivated to sell property.

The issue is the seller is very old fashioned and don’t really even have knowledge about running a property. He just purchased as is.

The seller has tenants that fully occupy residential not only that the seller also has a family who resides and the family lived there over a decade.

The seller does not have a certificate or compliance or has the seller even had a inspection done, that I’m aware of.

Questions

How do I go about this situation? What are the precautions with this because I feel like him selling the property it’s going to open up a bigger problem in the end. Also I don’t want to see anyone lose there home.

So if someone can provide advice of this matter.

@Tenisha Walker , finding a property like the one you describe, with many problems is really the kind of opportunity that real estate investors look for. I would suggest starting with a list of the problems that you need to solve e.g. Get a certificate of occupancy, get state inspections, ensure that all tenants have got leases and are paying rent, get rent up to market etc. Against each problem you will need to describe the remediation plan including how much time and money it will take. All of this will inform you of what price you can reasonably pay in order to make this deal a financial success. Good luck!

Are you the buyer?

Check with the city and building department on a certificate of occupancy, building violations and complaints. If the residents do not have leases or are on a month-to-month agreements, you will need to determine if you will renew when it expires or give proper notice (hint: you need to give notice). Also, I should point out that it will be hard to qualify for a traditional loan without current leases. I'm not familar with needing a state inspection, but you certainly want to understand what work will be needed to the property and budget accordingly. 

If you are the buyer, these are all good things that can be fixed, you just need to account for the work and costs to address them.

@Tenisha Walker Are you concerned about the family living in the property (possibly for free), would be forced to leave, and perhaps without a place to go, once a new owner comes in.

Looks like you are trying to broker/wholesale this property, is that correct?

The first thing a potential buyer will want to do is look at any financial records. Rent rolls, T-12, etc. It sounds like this seller may not have any of that, which will make it more challenging.

Good luck.

@Tenisha Walker

The best thing for the family is to get on a current lease. Without a lease a new owner will have the ability to relocate them. As a buyer, this may kill a deal, especially if rents are way below market and it's clear that they just signed the lease just before the sale.