So I think I found a good deal. The owner says he's made money and now wants to get out of the biz and sell down his holdings in the next 5 years. He also claims the property I'm looking at is always rented. Then I noticed on craigslist that he has ad's for the place to be rented. Is it a normal course of due diligence to get rental records? It's possible the leases are up I guess. But of course I want to be sure. Thanks.
Hey John, I'm a newer investor in Camden/Gloucester county NJ. I would absolutely make sure that his rental history matches his claims. If he really wants to sell the property he should have no problem producing documents to support that.
I always ask for signed estoppel agreements from every tenant to verify that the rent, lease dates and security deposits match up with what the owner/seller has given you. I also like to have a rental ledger for every tenant, in addition, a copy of their rental application.
In addition, all of the feeder sites hold on to ads way beyond the lease dates, check and verify!!!
Yes, you should verify everything during your due diligence phase. You should review the records of each tenant, to include application, lease agreement, payment history, etc.
You should also complete an estoppel agreement. This is a form for you to fill out with the tenant and Landlord that basically confirms their contact information and major lease terms. It should include the lease start date, end date (or month-to-month, rent rate, security deposit, any pets, etc. You can search Google to find examples.
@Kim Meredith Hampton please tell me, what are estoppel agreements? how does one go about getting them?
Ask for Schedule E if he reports on personal taxes. That's the real numbers. Have the seller put everything in writing and ask for references. People BS all the time in this business. And prices are way too high right now. Tread carefully.
Like others if the story told is not what you learned, you need to either ask him for proof or walk away. Your first order of business is demand a credit report and background profile.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing