Hi fellow BP nation,
I have (what seems to be) a pretty good deal that I intend to flip, but there's one catch... it's currently tenant occupied. The tenant is month-to-month and the seller is willing to issue a 30-day notice, but they want to close before the tenant vacates the property. I am paying cash so I have the flexibility to close quickly, but I'm not sure that I should. The listing agent made it clear that the seller wants out now and that they won't be willing to wait until the tenant leaves. Should I take the risk of buying the property occupied or walk away if the seller still refuses to wait until the tenant vacates?
I would buy it if it's a good deal. The one thing you should do though is treat the tenant as if it was your permanent tenant. I.e. verify that the tenant has been paying on time, do a background check to see if the tenant has a criminal history and verify that they have good credit. If all that checks out you can move forward but make sure to collect the security deposit from the seller. Also talk to the tenant and try to get a feel for what their situation is. Since there is extra work in purchasing a house with a tenant and you are taking on more risk, the price you pay should factor this in.
In such a situation, if the vendor provides proof that he's served notice and the tenant has received/acknowledged it, we would close, but we would hold-back a portion of the purchase amount in escrow (with our attorney) until the tenant had left and any fallout (damage, prolonged eviction, etc) would be funded from that hold-back.