Buying a property with tenants that don’t pay

Allentown, Pennsylvania
General Real Estate Investing
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Buying a property with tenants that don’t pay

Johnathan Cummings
Member since 2021 · 18 posts · 3 votes

Hello BP, I’m looking at buying a property to flip. Currently the seller is an estate and they’re willing to seller finance for 2 years at a $600/month payment, 4% interest, $5,000 down. Currently there is a tenant in there that the estate inherited that has no formal lease and hasn’t paid in 6 months. If I buy this property what are my risks and what is the best approach to evict them, go through eviction process? My thought was to just offer them cash to leave. This is in Bethlehem PA.

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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
1y

Have done this in Michigan for a huge discount on the purchase price.

Appears you are getting great terms on seller financing, so that may be worth it.

It will all come down to your level of confidence in what YOU can do!

Concerns:

1) How long it will take to evict the occupant
2) What claims occupant may have to the property you aren't aware of - are they a relative?
3) Potential damages occupant will do in retaliation for being evicted

Recommend visiting the property and talking your way into it (do NOT tell them YOU are a potential buyer - you only work for that "person") to VIDEO (for future documentation) the interior for its condition and then use this as an oppotunity to chat with the occupant to learn why they are there and why won't they leave. You may be able to VAGUELY find out their terms to move.

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    1y

    Only buy if it comes vacant.

    2Reply
  • Caleb Brown
    Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
    1y

    I would talk to an attorney and understand the eviction process. You need to know costs, time it will take. Assume the place is a total rehab once that tenant leaves. You can also try cash for keys

    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1y

    The biggest risk is time. Trying to get that tenant out could be problematic. My recommendation would be to see if you can offer cash for Keys and specify a date you want them to be removed

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  • Denise SuppleeBusiness Member
    Realtor · Willow Grove, PA · Member since 2017 · 982 posts · 643 votes
    1y

    Besides offering cash for a voluntary move-out or going through formal eviction, you could consider negotiating a short-term lease buyout, where you agree on a fixed move-out date with some compensation. Another option is to take the property as-is and factor the tenant situation into your renovation and timeline, sometimes assigning the eviction to a property management company can streamline the process. In any case, make sure you understand Pennsylvania’s eviction laws and build any potential delays or costs into your plan before committing.

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  • Drew SygitBusiness Member
    Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
    1y

    Have done this in Michigan for a huge discount on the purchase price.

    Appears you are getting great terms on seller financing, so that may be worth it.

    It will all come down to your level of confidence in what YOU can do!

    Concerns:

    1) How long it will take to evict the occupant
    2) What claims occupant may have to the property you aren't aware of - are they a relative?
    3) Potential damages occupant will do in retaliation for being evicted

    Recommend visiting the property and talking your way into it (do NOT tell them YOU are a potential buyer - you only work for that "person") to VIDEO (for future documentation) the interior for its condition and then use this as an oppotunity to chat with the occupant to learn why they are there and why won't they leave. You may be able to VAGUELY find out their terms to move.

    [email protected]248-209-6824
    Logical Property Management4.9459 Reviews
    WebsiteView Page
    3Reply
  • Johnathan Cummings
    OP
    Member since 2021 · 18 posts · 3 votes
    1y

    Thank you for all of the responses, very helpful!

    0Reply
  • Crystal SmithPro Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
    1y
    Quote from @Johnathan Cummings:

    Hello BP, I’m looking at buying a property to flip. Currently the seller is an estate and they’re willing to seller finance for 2 years at a $600/month payment, 4% interest, $5,000 down. Currently there is a tenant in there that the estate inherited that has no formal lease and hasn’t paid in 6 months. If I buy this property what are my risks and what is the best approach to evict them, go through eviction process? My thought was to just offer them cash to leave. This is in Bethlehem PA.


     The first thing I would do is check the laws in your area regarding the eviction process & how long it would take.  Once you understand the process & the potential time then run your numbers to see how long you potentially be paying $600 per month before truly having control of the property.   Whatever those numbers are should be added to the cost of the renovation.  If the deal is still worth it then maybe proceed. 

    Another idea is to structure your offer where $ are escrowed to include cash for keys, but no closing on the deal until the current owner gets the current tenants out. It then puts the pressure on the current owner, with your help, to get the tenant out while limiting your risk. If the owner is unsuccessful, then you get your EMD back.

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  • David Krulac
    Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
    1y

    @Johnathan Cummings  Make the sales contract contingent upon the property being vacant.  Make it the sellers' problem not your.

    2Reply
  • Nicholas Dutson
    Real Estate Consultant · Salt Lake City, UT · Member since 2025 · 16 posts · 9 votes
    1y

    Here’s how I’d underwrite and structure this, speaking as a landlord/investor who’s been through plenty of “tenants-not-paying” acquisitions.

    Quick take: Either (A) make the seller deliver the property vacant at closing, or (B) get a steep enough discount + protective terms to be over-compensated for the time, cost, and risk of removing non-paying occupants. BP vets give the same guidance over and over: don’t make the seller’s headache your headache unless you’re paid very well for it.

    Price the headache. On small 1–4 unit deals with inherited non-payers, investors commonly require a deep discount or they walk. You’re taking litigation risk + downtime + re-tenanting + capex unknowns.

    Vacant-at-close clause (best case). Make closing contingent on actual vacancy and broom-clean condition, not just “seller will try.” If they can’t deliver, your earnest money is refundable and you walk. This is the cleanest version of “buy the asset, not the problem.”

    If you accept the risk, add guardrails:

    Escrow holdback at closing large enough to cover X months of payments + legal + turn. Example: hold back 6–12 months of your P&I + $5–10k/unit for legal/turn. Release tied to delivery of vacant, undamaged units (or after specific milestones like writ executed).

    Seller-paid legal: seller funds your attorney retainer from proceeds.

    Per-diem penalties for every day past a hard date that units remain occupied.

    Cash-for-keys budget pre-approved with the seller. Often the fastest/cheapest path—just document it well (mutual release, surrender of keys/possession, condition photos).

    Assignment of claims: If there’s significant arrearage, get an assignment (often low recovery odds, but it’s leverage).

    No-offset clause on the seller note—missed rents aren’t an excuse to miss your payment, so you need the holdback above.

    Extension option on your 2-year seller-finance balloon if occupants aren’t out by Month 18 (e.g., one 6–12 month extension for a pre-set fee). That de-risks timeline slippage.

    0Reply
  • Eric FernwoodBusiness Member
    Realtor · Las Vegas, NV · Member since 2014 · 995 posts · 1k+ votes
    1y

    Hello @Johnathan Cummings,

    It really comes down to the cost and the time it takes to evict someone. Ideally, you’d want them to agree to a cash-for-keys arrangement, but that may not interest them. Right now they’re living rent-free, so there’s little motivation for them to move somewhere else and start paying rent, even if you hand them cash.

    Eviction timelines vary a lot depending on the state and even the county. For example, here in Las Vegas, if a tenant doesn’t pay rent but hires an attorney and drags the process out in court, it usually takes somewhere between 17 and 35 days before they’re out. On the other end of the spectrum, I had a client in another state who went through an eviction that lasted 18 months.

    You also have to factor in potential damage. If someone is essentially squatting and you force them out, the risk of them trashing the property is very real. Back in 2008 and 2009, during the foreclosure wave, I saw cases where people poured concrete down drains, stripped copper wiring from the walls, left water running to flood properties, and caused extreme mold damage. The cleanup costs were huge. Because of that, I always plan for the worst, even while hoping for the best.

    My recommendation is to first get a clear understanding of how long it will realistically take to remove this person if they fight the eviction process every step of the way. If the cost and timeline are manageable, I would still try to negotiate a cash-for-keys agreement to get them out without damage. Keep in mind, if they have poor or no credit, there’s very little leverage beyond the eviction process itself.

    Even though you might feel like you’re getting a bargain—the seller probably factored in the hassle of removing the tenant. So, no matter how attractive the price or financing looks, if you can’t get the tenant out, the property turns into a money pit. So it’s crucial to plan carefully before moving forward.

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  • Adam BartomeoBusiness Member
    Real Estate Broker · Cape Coral, FL · Member since 2015 · 2k+ posts · 1k+ votes
    11mo

    The best option is to have a conversation with them to understand their motives and lay down the law. You will get a better understanding of what they are trying to accomplish and if they are open to moving without eviction or cash for keys.

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  • Tony Bacon
    Member since 2025 · 71 posts · 27 votes
    11mo

    If I were you I'd wait until it's vacant to buy, but if you have to do it, I'd try to offer them cash for keys and even offer to throw them a few hundred bucks to get movers. 

    Eviction is a pain in the ***, I don't know for sure because it depends on state, but it takes anywhere from 60 days -> 6 months. To file the paperwork doesn't cost THAT much, maybe a couple hundred, but the nightmare of getting someone out could take a mental toll on you and ultimately end up costing you thousands more - especially if they trash the unit. 

    0Reply
  • Christa RimonneauPro Member
    Investor · Lehigh Valley, PA · Member since 2016 · 11 posts · 5 votes
    11mo

    The eviction process in Bethlehem for non-payment is relatively straightforward, especially with no lease.  Once paperwork is filed it's 7-10 days for a court date. They usually grant 10 days for payment, on the 11th day you file possession - then another 10 days and locks are changed.  So approximately 30 days start to finish.  Feel free to reach out if you have any questions. 

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