House priced right to flip. But Long term tenant. What are options?

4 Replies

There is a property on the MLS listed well below market value and comps are priced right for a good flip. The listing agent says in his remarks "Investors Only. Long term lease in effect until 3/2018. Owner has installed new roof and new AC in 2005. Also updated insulation in attic and walls in 2005" The rent is $700 and is related to the owner of the property. Are their any strategies to use here? I'm open to any suggestion

Not sure of CA laws, but in NC long term leases need to be recorded with the county public records to be enforceable. Have you thought about buying out the tenant?

Some cities/states give you legal ways to displace a tenant such as moving in to make the home your primary residence or a major remodel that makes the home unlivable.

Ca is one of the more tenant friendly states in the union.  Not much you can do except to incentivize them to leave...or another option is to tie up the property then flip it to a local buy/hold investor.    Either way, I'd make a low offer.  At the right price, almost anything can be monetized.  

Other thoughts are: 

See if the owner is willing to carry some of the purchase. 

After tying it up, ask the tenant if they want to rent to own.  You may be able to get some or all of your cash back on lease option plus a little cash flow. If they did a 3-yr lease they probably like living there. 

Good luck!

Originally posted by @Yosef Fares :

There is a property on the MLS listed well below market value and comps are priced right for a good flip. The listing agent says in his remarks "Investors Only. Long term lease in effect until 3/2018. Owner has installed new roof and new AC in 2005. Also updated insulation in attic and walls in 2005" The rent is $700 and is related to the owner of the property. Are their any strategies to use here? I'm open to any suggestion

 Long term lease, and the tenant is related to the owner. Think that's the definition of a stitch up. Walk. Like everyone else has.

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