Investor · Columbus, OH · Member since 2015 · 142 posts · 52 votes
Hello everybody, I recently just purchased my first rental property duplex. This is my very first rental and I'm completely new to this whole real estate thing. I purchased it using creative financing with OFHA which is ohios down payment assistance program. Being how I had to use the OFHA loan I bought the property with 2 tenants currently living in the property, they have been there for years so i didn't feel right kicking them out before I closed on the house. I'd like some advice on what I should do with them and the rental agreements the day I close on the house. I really don't want to kick them out because they've been good tenants for the previous owners of the property, any help on what I should do?
Investor · Buffalo, NY · Member since 2016 · 668 posts · 209 votes
10y
Right now all you have is the seller's word these are good tenants. You are bound by the previous leases until each is up for renewal. Then tenants will complete a new application with background and credit check. If they fail background check they are out but you should have a good history of prompt payment before that time. Your new lease will be at market rate rent. You did collect both tenants' security deposits at closing and are keeping it, right?
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
10y
So, is this Ohio downpayment assistance program for investment properties? In Atlanta they're usually just for owner-occupied and if that is the case up there, then you really don't have much of a choice, but would have to occupy one.
Xenia, OH · Member since 2014 · 88 posts · 46 votes
10y
I would go in and meet with each tenant to get to know them and also check out each unit. Communicate with them that when their lease is up they will basically have to re apply and go from there. Also, if you will be raising rents I would give them heads up on that as well. Good luck!
Investor · Columbus, OH · Member since 2015 · 142 posts · 52 votes
10y
@Michaela G. no they do not have to be owner occupied. @Mike Creswell so say if I closed the fifth of this month would the tenants rent go to me the following month? How does that usually work
Investor · Milwaukee, WI · Member since 2014 · 811 posts · 420 votes
10y
If you close on the 5th, you will get the pro-rated amount of rent as a credit at closing. You will be get the pro rated amount from the 5th to the 30th
We recently closed on a duplex about a month ago on the 9th so we got at closing the rent from the 9th to the 31st plus we got the security deposits and last months rent that the tenants had with the previous owner. Make sure that you had the tenants fill out a Stoppel before you close so you know exactly what deposits they have with the owner. This will ensure that you get the appropriate funds transferred to you and avoid any disputes in the future. As far as the leases we have one tenant that has 8 months left on his lease so we have to honor it and the other side was on a verbal month to month so we offered them a lease and increased their rent effective Oct. 1st...today they called and said that they will accept. The advice that I can give you is if they're not on a lease get them on one and see if they're paying market rent or increase it.
One more thing is one of the first things that I did was call them and introduce myself and told them that we were officially the new owners and provided them with my contact info in case that an emergency aroused. It was a good call because they had concerns if we were going to fix it and sell it or what plans we had for the duplex. I also asked them how they paid there rent (mail, bank deposit, etc.) than I told them that I would be over in a few days to give them the new bank account info (both preferred to make bank deposit). I wrote a letter basically thanking them for their patience and cooperation during the inspection process and included info about us.
Investor · Columbus, OH · Member since 2015 · 142 posts · 52 votes
10y
wow great answers everybody truly appreciate the advice and the help. I now have an action plan that I will take into effect the day I get the house. Thanks again everyone!
Investor · Glassboro, NJ · Member since 2013 · 41 posts · 11 votes
10y
Hello all, my name is Dwayne Johnson. I am a new investor in New Jersey looking to invest in 2-4 units. I just want to tell you that this post is GREAT. I really appreciate you guys posting this. There is a lot of keys in this one post! Again thanks again for this!
Happy investing!!!
Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
10y
Hey @Justin Frye, there's already good advice above on interacting with your tenants and how to work on lease renewal. If you are new to this, the best advice I can give you is DO NOT tell the tenants that you own the house. Tell them you work for a property management company and will be their landlord, representing the owner. It makes everything so much simpler, raising rent, telling them to clean up garden, evictions, etc. You are simply enforcing the lease and following the orders of the owner.
We started doing this a few years back, and I have not since had an argument about collecting a late fee, service a landscape violation or 3 day notice. I'm just doing my job, and really feel for them- the guy who owns the place is a real jerk, not cool like me. Start an LLC, have some cards made and just "do your job." Good luck!
Investor · Columbus, OH · Member since 2015 · 142 posts · 52 votes
10y
@Corby Goade wow that's great advice I've heard this before on a bigger pockets podcast. I've thought about it and it honestly makes a lot of sense, I think I'll take your advice on this one. Thanks again!