Has anyone had any experience with buying property with renters that need to be evicted? I'm look at going under contract on a fourplex that is 100% occupied. Two of the renters have back rent. I was wondering how to word the contract so that assuming the renters back rents and security deposits?
My though would be to give them their security deposit back and forgive their debt if they leave. Otherwise I'd just go through the normal eviction process.
I think it might be easier to have the current owner deal with the deadbeat tenants and then purchase it without problems
I just purchased a 5 unit building with 3 tenants. One on month to month and the three two had leases ending March 2018. The month to month was easy to remove with lease termination 30 days out. The other two were both behind on rents too. When it was the first of the month, I reminded them the total amount was due including back rents. Neither paid all and I posted 3 day notice. Again nether paid all so I filed for eviction. I offered both tenants to sign a lease termination and vacate by a certain date and remove all item, and I would cancel the eviction. Both complied and I kept security deposit and got them out much sooner than March 2018 so I could remodel!
When we've purchased properties with inherited tenants we have not received the deposit from the seller, so something to watch for. You're talking about a variation of Cash for Keys. Have you been inside the units to see how they are taking care of them? If you see any reason to keep them as tenants, wipe the slate clean and start again, perhaps. If there is no reason to keep them, do anything you can to incent them to leave, the sooner you have an empty unit the sooner you can get it cash flowing again. Evictions are time consuming and expensive, so give them a high amount/incentive for a very quick move out, reduce it for more time, and give a date when the eviction starts.
It all depends on how good a deal it is. If it's a great deal, the battle to get the tenants out will be worth it, assuming you have the reserves to handle it.
so from what I have seen is evictions cost 500-1000 from what Iv seen online and it takes about 3 months in the worst case. The sale price was at 210k, they accepted my second offer at 186k in AS Is condition . It Has a yearly GPI of 28k a year. So I think it's under priced for the market it's in. But with the as is contingency I feel like something may come up in the inspection...
From the date you take over the tenants are considered WHOLE as in all rents are current to date of ownership... Security deposits with interest should be paid to you by Seller,, if you don't include that in Purchase agreement then your out any secuirty deposit the tenant paid and you'll have to cover that..
As far as damages,, you buy the builidng so date of ownership is date you make inpsection of each unit and from that date forward you can deduct for damages, cleaning ...
So trying to evict someone you will have to
1st give all tenants your info your new owner and rent is due and payable to you.. If they have outstanding balance due on current month's rent you'd have to prorate balance from date you took over.. no late fee unless the prorated part is not paid in three days..
2. you schedule inspection of unit within a week or so of ownership and give copy of condition sheet to tenant, take photos'
3 you have to follow original lease tenants have,, if no lease then they are considered month to month so all notices would need to be given prior to the first of month for any non-renewal lease termination notice.
4 Download you state landlord tenant laws..
5 your real estate agent should be more on the ball.. and have told you this from the GET GO
@Deanna McCormick *****
Know the law before you invest.