One of my inherited tenants that has always resented me because of my age and me being his land lord wants to know if I would work with him so he could buy a duplex around the corner.
He is 1 month in to his year lease, and the original owners of the duplex contacted him to see if he wanted to buy another one of theirs. I personally would rather have him out so I can get into his side and start renovating his side.
The problem is I'm not ready with the one side yet, and I don't want the holding costs it would take to have a vacant duplex for the month or two it would take to get the both of the side ready.
I would like to work with him. I'm thinking of offering him to change his lease to a 6 month term and withholding his security deposit.
What would you guys do in this situation?
I would be flexible and help him out. I would let him out of the lease without penalty. It is likely to take a month or two for him to qualify and complete the process of buying the other property. Then you would be able to renovate his unit sooner and get it ready for the next tenant (or for the flip if that is what you are after.) Win-Win. Unless he told you he resents you because of your age and your ability to buy real estate, I would not assume that is the case. It may just be that he has his own dreams that he didn't think he could realize until now. Help him to make it happen. Good deeds come back to you. It will also help your current relationship.
Marcia Maynard, Fischer Properties | Podcast Guest on Show #83
I'm with @Marcia Maynard on this one. No sense in pissing this person off for the sake of it.
On the same note, there is not reason for you to lose money. Switch the lease to a month to month lease and you'll have no issues. If your tenants pays on time there is no reason to keep the security deposit.
At the end you'll have a happy tenant that probably decides you aren't a horrible person and you'll have made another landlord happy. If the landlord is selling their properties, go trade on your good deed and buy some of their other places :)
You could be his mentor , tell him you will teach him something about leases and how not to lose money as an investor . Make him buy out of the lease. School cost money
Sounds like you only need him to stay for 2-3 months. Why not change his lease to that? If he is ready to close after 30 days ask him to split the amount of rent you will lose.
I would let the guy buy out of his lease. If he is able and ready to buy out of his lease and get financing on a property (i.e. good credit, down payment, DTI) then he must be somewhat secure.
Personally, if I thought the guy was ready to make this jump. I would try to approach some kind of partnership with the guy. Put the new duplex in his name, do a 50/50 split, and let you manage it and make sure you guys don't lose money.
Just a thought
Thanks for the insight guys.
He is a long term tenant of 9 years with the previous owners and they are going to offer him seller financing with the new place.
I am going to work with him so I am going to offer him to change it to a 6 month lease and hold his $500 dollar deposit from the previous owner 9 years ago. Seems fair to me
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