duplex with "problematic" tenants

10 Replies

Good morning! I need some advice please. I'm interested in this short sale duplex in the Los Angeles area. The agent said that the current tenants are very problematic and the back unit of the duplex is currently rented Section 8. What kind of advice would you experienced investors have for this type of situation? What are my options? Thank you! 

This sounds like a disaster waiting to happen... If it's that good of a deal you can buy it and turn them over when their lease ends, or have a property manager do it if they'll handle section 8 tenants, many won't.

Disaster waiting to happen seems a bit strong, but it is a situation where you'll want to take extra care when running your numbers and ensure that you'll still get a good deal even if you have to pursue a formal eviction on both units. 

Include the possible eviction costs, budget higher on the rehab (in case the departing trouble tenants do more damage) and an extra 2-3 months of holding before being able to rehab and rent/flip in case you have to follow through the full eviction process. 

What is problamatic? about this tenant.   Are we talking about someone who is not paying their rent?  That certainly is a problem.  

Are we talking about someone whose behavior is turning into an eviction well that's certainly a red flag

Nothing wrong with a section 8 

Not enough information. What specifically is problematic about the tenants? The fact that one of the tenants is section 8 doesn't provide any useful information by itself either
Danny Luu I tried to invest in California for appreciation at its peak in 2006 and failed miserably. My thoughts are that the cycle continues and we may be approaching another peak if we haven't already in some California markets. The prices are very high and putting all your money into one basket in a cyclical market can be very risky and limits your diversification. However if you know what you are doing you can make a lot of money doing this. After my fail I decided to get into cash flow buy and hold out of state investing. You can get more bang for your buck and make a slow and steady income regardless of what happens to the rising and falling property values. Just a suggestion My opinion on Multi unit properties are that they can be difficult to manage, tend to bring in lower end tenants, and harder to resell. They are probably not ideal for a newbie investor either. New investors are drawn to them because they look like the better cash flowing option. But realistically when you in the long wrong it will cost you more with Vacancies, Repairs, and Evictions. Just my opinion. Good luck to you what ever you decide to do.

Thank you all for your advice. I am trying to get more information from the agent/owner in regards to what they mean by "problematic" tenants. 

@Account Closed That is really good information. I am also a little worried about the market hitting a peak and thats why im trying to be as smart as I can about getting into a property at this time. Honestly, I will probably end up passing on this but i was to exhaust all my options and at least take away as much as I can from this experience in regards to research and due diligence. thanks!