I have been on the search for a property to house hack and one popped up in a great neighborhood but both units are currently rented. I am finding out the lease terms now. Is there anything you can do if their lease terms are not up for a while or is it just something that wouldn’t work out? This isn’t the first one that has come up that I have had this problem and I am curious if anyone has any experience with this/advice
If they are on month to month you can ask them to leave in CA that would be about 60 days. If they are on a longer term lease you can always offer cash for keys to see if they want to leave early, or just wait until one of the unit's leases is up, it is unlikely they were all signed at the same time.
@Aaron K. thanks for the input! I had not thought of using cash for keys that’s definitely a good idea to try.
Unless the tenants are in violation of the current lease agreement you will not be able to evict them.
I would acquire copies of the current individual lease agreements before making any offer on the property. I would also acquire a copy of an up to date financial report for the property to see if they have been negligent with any of their rental payments.
If you do move forward with an offer I would also see if you can get the security deposit transferred to an escrow account held under an LLC you form for the property. If the current owner walks away with the security deposits and the tenants cause damage before they move out you will find yourself in a hole.
Lastly if you do make an offer and look to close, I would speak to the tenants and let them know management for the property will be changing, ___ is the day rent is due, ____ is the day a late fee will be applied, and if they are negligent you WILL file for an eviction. I have found that if you set the ground rules from day one, your tenants are less likely to yank your chain.
Regardless, inherited tenants can be a tricky matter.
Best of luck!
@Christopher Finn thank you that info is very helpful. There is another triplex I have been considering as well. Is a financial report something that should be available to me on any property if I request that?
Yes, I always ask for current and past financials for a multifamily property that was being rented out.
I take their financials into consideration when determining if I can find ways to reduce operating expenses and increase my bottom line.
Another strategy you could try is put a contingency clause in your offer stating:
"Property to be vacant upon closing date and free and clear of all personal property"
Essentially, this makes your current problem become the sellers problem.
To try and entice the seller maybe you offer anywhere from 1-5K over asking price. Roll the additional cost into your mortgage and it really wont have to much of an affect on your monthly payment.
Just a thought, keep us posted and best wishes!
@Ryan Jopson that is a good idea I just found out they are month to month which is good so I will have to decide after I go see on Monday
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