Cash for keys tenant buy outs in Oakland California
I did my first tenant buy out today. Here is what I have learned.
There are Lots of other explanations about why the bay area rent control is weird. If someone has enjoyed quite and respectful use of the unit who is in good standing and who conforms to the lease there is no other option if you want to increase the rent up to market. Rent control has "Just Cause" eviction so there needs tlbthe some material reason not just "I don't want to renew your lease because there is a marker difference of X percent."
DO NOT push them to get the document reviewed by their lawyer because they may go to housing (free on the frontend) and then it will be painful and expensive. You will be paying housing to represent them and they will roll their interests in with the tenants.
- YOUR attorneys are needed
- figure out alternative housing options
- be able to refer a mover
- identify a storage location local you can refer
- look at the used space in the unit and offer based on comps for replacement for actual bedroom used for 6 - 12 months
1) talk to an attorney that's local to the area That knows the rent control laws. Berkeley is not the same as Oakland so YMMV. If you Don't have a contract you can offer money and still be used for wrongful termination.
2) your asking someone to take on the anxiety of moving for money so it's best to have answers to common objections
3) Have a mover they can use. It's stressful to pack your stuff if you help them understand you have considered this for them then it will be taken into account
4) Already have storage space figured out local to the unit. You don't know what they are planning on doing so ensure you express you have thought of this and have looked for a good price for them already
5) look at how much space they are using and based on the actual used space talk to done property managers in the area who have inventory. See if you can work out a deal to walk them into one of those units and ensure that you sell this in the pitch.
The money will move in pieces first installment upon execution of the contract second installment on inspection.
You can structure the deal HOWEVER you can negotiate.
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I started out at 20k because that's real number and not insulting. 1bd are 1695 per month for example.
The tenant wanted consideration for upgrades they made to the unit during their tenure. I offered 3k as they were nice but not newly installed
Now 23k
They then asked for consideration for the final month they would be present 1k. I said done.
NOW 24K
Remember the anxiety your creating ensure that you offer up 60-75 days so they can have sufficient time to find alternative housing in the case they don't want to pick from your property manager inventory.
As far as the contract it needs to address condition. As long as you get it back it does not matter in large part what signs of wear are going to be present you might need to rehab it to get top of market rates anyway. This should to be addressed in the contract.
I deal with cashiers checks for the protection of the tenants and record keeping
First installment was 5k then 19k upon inspection.
Be genuine talk to them about how this creates an opportunity for them to re-write the course of their destiny and they could be owners of a condo or something in places like Sacramento.
Above all DO NOT push them to a lawyer it will make it hard for you and your pockets.