Hello, my name is Mark Abend and I am a twenty-two years old and I have just started a full time working in Delaware. I would like to start my investment career officially in the next couple of months.
I'm looking into a property that is currently being rented out. I want to do my due diligence on the current tenant. I was wondering what I can ask the current seller to gain confidence in putting an offer in for this property. For example, can I ask for proof of payment on rents to make sure that the tenant is paying their rent on time. I'd also like to know if anyone has any tips for making sure the current seller is telling the truth about the tenants, so I don't get stuck with a seller who is talking up the tenants just to get rid of their property.
What type of questions should I be asking and what questions are too intrusive to the sellers privacy? I would love any tips and tricks that some of you experienced investors have.
Hi Mark, congrats on getting started. I'd suggest picking up Brandon's book "The Complete Guide to Managing Rental Properties." It's a fast read and comes with a bunch of helpful forms, interview questions and I think now they offer state-specific paperwork as well.
As far as your specific questions: your realtor, in their due - diligence will get you a "rent roll" to see the payment history. You should also know the status of their lease (how many months left on it, is it month to month, etc..), how much the deposit was, etc... If your realtor is super thorough, they would do an Estoppel Agreement - you can look those up - but one also comes the aforementioned book. Best of luck to you!
I always check the court filings for the local municipal and common pleas courts online. If someone has creditors chasing them, or has a domestic or substance issue, it will often turn up. It's all a matter of public record. I also check out facebook....that can be very telling.
Like others have suggested, you can probably get a lease ledger, which would show payment history, and check local court records to run your own background check.