Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes
I’m buying a house in a couple of days and there is a renter in it that hasn’t paid their rent for the last month according to the seller. The renter went on a month-to-month lease over a year ago. Should I get the seller to sign an affidavit that they haven’t paid rent in the past month so that I can start the evection as soon as I close?
If they had of paid in the past month I would give them a 30 day notice, because we really need them to leave.They are paying Way below market. We would like to fix the house up a bit and sell it.
Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
6y
@Joe S.. I've said it at least a thousand times on BP (ok, maybe 12-20 times), do NOT make a headache tenant your headache when purchasing a property. Demand the unit be delivered empty and broom clean at close. Oh, they haven't left yet? Then you don't close. I know, I know. Covid. Well, if the seller cannot get rid of them, then you better be getting some sweet concessions to buy the place. Way below market rate. Cash in hand for the headache. Something. I am always "amazed" at the number of people that buy places knowing the current tenant is going to be a headache.
Investor · Youngstown, OH · Member since 2017 · 2k+ posts · 2k+ votes
6y
If their lease is month-to-month, the seller should be able to terminate their lease without cause with a 30 day notice. What are the terms of the month-to-month agreement?
Rental Property Investor · Ankeny, IA · Member since 2017 · 2k+ posts · 3k+ votes
6y
@Joe S.. I've said it at least a thousand times on BP (ok, maybe 12-20 times), do NOT make a headache tenant your headache when purchasing a property. Demand the unit be delivered empty and broom clean at close. Oh, they haven't left yet? Then you don't close. I know, I know. Covid. Well, if the seller cannot get rid of them, then you better be getting some sweet concessions to buy the place. Way below market rate. Cash in hand for the headache. Something. I am always "amazed" at the number of people that buy places knowing the current tenant is going to be a headache.
@Joe S.. I've said it at least a thousand times on BP (ok, maybe 12-20 times), do NOT make a headache tenant your headache when purchasing a property. Demand the unit be delivered empty and broom clean at close. Oh, they haven't left yet? Then you don't close. I know, I know. Covid. Well, if the seller cannot get rid of them, then you better be getting some sweet concessions to buy the place. Way below market rate. Cash in hand for the headache. Something. I am always "amazed" at the number of people that buy places knowing the current tenant is going to be a headache.
I’m buying it very right. If I didn’t buy it with a tenant I’m sure 50 other investors would’ve been happy to get the same deal. I think the tenant helped me get an amazing deal in the respect that the seller did not want to deal with them.This was an off market deal. But I hear what you’re saying and if it was a base hit house then you are perfectly correct.
If their lease is month-to-month, the seller should be able to terminate their lease without cause with a 30 day notice. What are the terms of the month-to-month agreement?
It was a two year lease that ended a year and a half ago. So My understanding is that it basically turned into a month-to-month after the fact.
Investor · Memphis, TN · Member since 2013 · 741 posts · 845 votes
6y
@Joe S. we are problem solvers as investors! Your willingness to solve a problem that others deem a headache or to hard will reap great benefits for you! I have purchased several homes with this exact issue. I have found that cash for keys works best! There is usually a number you could offer the tenant to vacate that will make them move. I know what it will cost me in time and money to go through a formal eviction and as long as I can offer cash at that price or less I will pay them to leave.
Build in the extra cost in money and or time getting the tenant out into your analysis and you should be just fine! There is one caveat to this advice, I do live in a landlord friendly state and this maybe untenable advice if your state is tenant friendly!
@Joe S. Is having the property delivered vacant something the seller is willing to do?
Not at the price I’m buying for. If the seller got the renter out he could probably sell it to someone else for way more than me. I am basically trying to figure out whether or not I need to try to evict them or give them a 30 day notice. I don’t see where I should give them a 30 day notice because they are not current with the rent payments according to the seller. I thought about getting the seller to sign an affidavit stating that the renter was in default and had not paid for the past month. I could use this in evection court if the renter protested that they paid the seller. My first goal is to try to work a deal with the renter peaceably.
@Joe S. we are problem solvers as investors! Your willingness to solve a problem that others deem a headache or to hard will reap great benefits for you! I have purchased several homes with this exact issue. I have found that cash for keys works best! There is usually a number you could offer the tenant to vacate that will make them move. I know what it will cost me in time and money to go through a formal eviction and as long as I can offer cash at that price or less I will pay them to leave.
Build in the extra cost in money and or time getting the tenant out into your analysis and you should be just fine! There is one caveat to this advice, I do live in a landlord friendly state and this maybe untenable advice if your state is tenant friendly!
I do plan on doing a cash for keys if possible. Great idea! I did my first cash for keys a couple of months ago and it went against the grain, because the guy was in default in a big kind of way. I should’ve used this tactic a long time ago.
Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes
6y
Give 30 day notice. If any issues do a cash for keys or at first say I will pay for moving truck etc. I have had a few instances similar but never really had issues getting anyone out.
Investor · New York, NY · Member since 2019 · 44 posts · 30 votes
6y
Hello Joe,
I would really make sure it was just 30 days they didnt pay the rent. It sounds like they stopped paying rent for a while which turned into a big headache that made the seller want to sell. Why would you want to sell on the first non-rent payment?
I would ask for proof for the last time they paid rent. Reading everybodys responses, if you believe the price is right to deal with this headache then go for it. Cash for keys is a great idea.
Investor · New Orleans, LA · Member since 2014 · 1k+ posts · 944 votes
6y
I think the simpler way to handle this is for the seller to pay you whatever the pro-rated rent is on the day of closing. Not your problem the tenant didn't pay the seller that rent. And then, after closing, post a 30-Day Notice to Vacate with an additional "cash for keys" offer if they leave by X date.
I can't speak legally on this, but it sounds like it would be dicey to try and evict someone for rent they owe to the previous owner, even if you have written proof from that person.
The next biggest piece of advice I would give is to make sure you have an estoppel that is signed by both the tenant and the current owner, that the lease is month-to-month, the current rent is $X, and the current security deposit is $Y.
I was in almost this exact same situation last year with two duplexes (same seller). Only one tenant was late on rent at the time of closing, but I knew all the tenants were "problem payers" and I would probably have to clean house. I calculated "worst case scenarios" for evicting everyone and took that cost into consideration with my offer.
One tenant moved out before closing (score!). One tenant had a weird rental due date that was something like the 22nd of the month. I closed on the 24th and the owner gave me their pro-rated rent, even though they hadn't paid it yet. He was not happy about that, but not my problem he always let his tenants pay rent whenever they felt like it. They overstayed their 30-Day Notice to Vacate by about 10 days, but we could see they were packing and moving stuff out so we didn't worry about it.
The other two tenants did not pay their next month's rent. No surprise there. We posted the appropriate Pay or Quit notice. Eviction court date set toward the end of that same month. Neither tenant showed. Sheriff was out there the next day, but they appeared to have already moved out. We'd seen them each moving out the weekend before court, but neither one contacted us that they were officially "gone", so court-ordered eviction it was. It boggles the mind. All they had to do was tell us in writing or text "hey, we're out" and they wouldn't have had that eviction on their records. But you can't help people who won't help themselves.
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
6y
You shouldn't need to do cash for keys in Texas. The issue with cash for keys is it doesn't give you legal rights to the property. They can leave and show up the next day, then you still need to evict. Evict "John Doe and Uknown Occupants". That covers any random person who may walk into the property. Give them 30 days notice to vacate and if they don't leave, evict them. Swift and easy in Texas. Don't fixate on non-payment, because if they pay you, the money goes to the previous owner. Take non-payment out of it and just explain you are no cause terminating so you can rehab the property.
If you have a non paying tenant, you better factor at least 6 months of lost rent and eviction cost into your cost equation. What you can try is what i am trying to do with a property im curretly in escrow. Ask the seller if he is willing to offer the tenant cash for keys right now while you are in escrow. Tell the seller you will compensate at end of escrow the cash for key amount so everybody wins. The tenant is already not paying so there is no harm in having the seller ask them this legtimate proposal. This will help you gauge right now how hard this tenant wants to play hardball. If you offer him 1-2 months rent as cash for keys offer and he rejects then you know you got a squatter that plans to be there until eviction comes.
You shouldn't need to do cash for keys in Texas. The issue with cash for keys is it doesn't give you legal rights to the property. They can leave and show up the next day, then you still need to evict. Evict "John Doe and Uknown Occupants". That covers any random person who may walk into the property. Give them 30 days notice to vacate and if they don't leave, evict them. Swift and easy in Texas. Don't fixate on non-payment, because if they pay you, the money goes to the previous owner. Take non-payment out of it and just explain you are no cause terminating so you can rehab the property.
Joe, With cash for keys can I have the tenant sign that they have fully released the property at the time I give them the cash for keys? It would also include that they would be trespassing if they came back on to the property.
Personally, I would offer the tenant $1500- $2,000 to leave and have them sign a form for the money on their way out. If they agreed to move out by this day and time you will be there with check in hand.
I know this might get a lot of kickback but this would be a last resort method to get them out peacefully without damaging further.
Personally, I would offer the tenant $1500- $2,000 to leave and have them sign a form for the money on their way out. If they agreed to move out by this day and time you will be there with check in hand.
I know this might get a lot of kickback but this would be a last resort method to get them out peacefully without damaging further.
I agree with your statement. This’ll probably be the first effort instead of the last resort though. Time is money and the faster I get them out the better off I’ll be.
You shouldn't need to do cash for keys in Texas. The issue with cash for keys is it doesn't give you legal rights to the property. They can leave and show up the next day, then you still need to evict. Evict "John Doe and Uknown Occupants". That covers any random person who may walk into the property. Give them 30 days notice to vacate and if they don't leave, evict them. Swift and easy in Texas. Don't fixate on non-payment, because if they pay you, the money goes to the previous owner. Take non-payment out of it and just explain you are no cause terminating so you can rehab the property.
Joe, With cash for keys can I have the tenant sign that they have fully released the property at the time I give them the cash for keys? It would also include that they would be trespassing if they came back on to the property.
It doesn't matter what is on paper. That is the point with cash for keys. These people are already violating a written agreement. Even if they sign something, they are not trespassing any more than they would be if they didn't have a lease. All they need to say to the police is, "I am a tenant" and the issue becomes a civil manner. I have seen it happen multiple times where someone gives them cash and they are back the next day.
It depends on how the lease reads. In that case it may be better to serve notice based on unpaid rent. You could have them out by the end of the month. I would try talking to them. I would tell them you would prefer they leave on their own, so there is no eviction on their record making it harder to rent in the future. Most people will just leave in that situation.
Rental Property Investor · Belmar, NJ · Member since 2020 · 18 posts · 5 votes
6y
They say don’t buy a house with an existing tenant. I would have the seller start the process as part of your purchase agreement. Eviction process not easy and with Covid it will be much harder to evict when we are finally able to do so.