Triplex with late rent?

[Chris C.]

Hey all,

I'm looking at a triplex in a target market. Cap rate is high, but the two units that are currently rented are behind. One unit is being evicted by the wholeseller that is working with me. The second unit will probably also be evicted shortly. I have been told end to end that the eviction process only takes 3 weeks, but I have my reservations. I understand that all 3 units will be fully rented before closing.

Would you suggest that I let the wholeseller work their magic, or just find a new place? Nothing strictly tying me to the evicted property, but just wondering if there had been any success stories doing otherwise?

[Laura Kayes]

Hi @Chris C.,

I'd be weary and very careful in this situation. A wholesaler is not a real estate agent or a property manager, and can not evict tenants unless this is their own property. They simply take a property and assign it to a buyer and take a fee.

Eviction laws vary based on the state, but depending on when you're looking to close, it would be highly unlikely that the tenants would be evicted, the units would be turned over, and new tenants would be in place by the time you close. There could be substantial amount of work that needs to be done on the units, and finding tenants also takes some time. Additionally, once a tenant is evicted, they can still refuse to leave and a writ of possession would have to be filed. It can be a lengthy process.

If you aren't tied to that property, I'd look elsewhere, and also would be very questionable about the wholesaler you're working with.

Best!

-LK